The USDCAD is trading in a very narrow 16-pip range today, with buyers and sellers battling for control near a key technical support level. That is not a lot of movement, and at some point the range will break. Traders will then look for momentum in the direction of that break.
The broader bias remains tilted to the downside following Friday’s stronger-than-expected Canadian jobs report and weaker-than-expected US employment report. Those releases sent the USDCAD sharply lower, away from its falling 100-hour moving average (blue line on the chart above) and through the swing area between 1.3948 and 1.3966 (see red numbered circles and yellow area on the chart above).
The next key target for sellers is the rising 100-day moving average, currently at 1.39167. Friday’s low reached 1.39248, while Monday’s low and today’s low have both held just above that level near 1.3929. The repeated tests highlight the importance of the 100-day MA as support.
If sellers are going to take firmer control, they need to get below that 100-day moving average at 1.39167. The last time the USDCAD traded below its 100-day MA was back on May 14, when the average was near 1.3715. From there, the pair ultimately climbed to its 2026 high of 1.4247 on June 24 before beginning its current rotation back to the downside.
A break below the 100-day MA would put the 50% midpoint of the move up from the May 1 low at 1.3899 in play. Get below that level, and attention would turn toward the 200-day moving average at 1.38547 (the lower green moving average on the chart above).
Conversely, if buyers can start to exert more control, the first step would be getting back above the low of the broken swing area at 1.3948. Above there, the top of that area at 1.3966 would be targeted, followed by the falling 100-hour moving average at 1.39812.
A move above the 100-hour MA would be a more meaningful shift in the short-term bias and open the door toward the 200-hour moving average near 1.4009. Ultimately however, the price would need to get and stay above the 200 hour moving average to give the buyers control over the sellers
Bottom line: Sellers remain more in control, but the 100-day moving average at 1.39167 has been a stubborn support level and is helping to neutralize the downside momentum over the last two trading days. At the same time, buyers have been unable to reclaim even the first resistance target at 1.3948. That keeps the bearish bias intact, with the 100-day MA representing the next key hurdle for sellers.
This article was written by Greg Michalowski at investinglive.com.