The USDCAD tested a key support swing area yesterday on two separate occasions between 1.3813 and 1.3832. Each time, buyers emerged and pushed the pair higher.
Today, however, the price has slipped back into that same zone, with the low reaching 1.3823 — right in the middle of the support band. Just below, a cluster of moving averages adds importance, including the 100-bar MA on the 4-hour chart at 1.3804, the 100-day MA at 1.3768, and the rising 200-bar MA on the 4-hour chart.
A break below this broader support region would be needed for sellers to seize greater control and open the door to additional downside momentum.
On the topside, holding support here keeps the focus on the 38.2% retracement of the March-to-July decline at 1.3923. Last week, the pair tested that level ahead of Fed Chair Powell’s speech but failed to break through, leading to the latest rotation lower.
That failure underscores the importance of the retracement as a ceiling and leaves the downside bias in play for now. With the moving averages converging below, the battleground between buyers and sellers is clearly defined — but the burden remains on buyers to defend support if they are to turn momentum back in their favor.
