USDCAD runs lower adding to the sellers control. The key 200 day MA is eyed.
Coming into today’s trading, USDCAD had been confined to a relatively narrow range for the week. The high was set on Monday at 1.3964, while Wednesday’s low reached 1.3908 — a range of just 56 pips (see red box on the chart below). However, as posted yesterday, the sellers still had the strongest hand (see post here).
That changed today as sellers pushed the pair to a new weekly low at 1.3868. The weekly range has now expanded to nearly 100 pips, which is a little more respectable, although still not particularly large by historical standards.
More importantly, the move lower represents another leg in the step-by-step decline that has been developing since USDCAD peaked in mid-June.
From a technical perspective, the sellers have checked off several important boxes this week. The price held resistance within the 1.3948 to 1.3966 swing area, then moved below and away from the 100-hour moving average at 1.39295 and the 100-day moving average at 1.39185 (see blue lines on the chart above).
The pair has also broken below the 50% midpoint of the move up from the May 1 low near 1.3550 to the June 24 high at 1.4247. That midpoint comes in at 1.3899 — call it 1.3900 — and the break below that level represents another important technical victory for sellers in the stair-step move lower from the June high.
The low today reached 1.3868, briefly moving below the bottom of a swing area between 1.38683 and 1.3877. However, the decline has so far stalled ahead of two increasingly important downside targets: a channel trendline near 1.3859 and the 200-day moving average at 1.3852.
That 200-day moving average is particularly important.
The last time USDCAD traded below its 200-day moving average was back around June 1. At that time, the price broke below and based near the moving average around 1.3810 before reversing sharply higher. That rebound ultimately carried the pair to its 2026 high at 1.4247 on June 24 — a significant move in a relatively short period of time.
The 200-day moving average has since moved higher to 1.3852, but it remains a key barometer for both buyers and sellers.
As a result, I would not be surprised to see some apprehension on the first test of that level. Sellers who entered at higher levels may look to take some profits, while dip buyers may lean against the moving average looking for a corrective bounce. Importantly, the level also gives those buyers a clearly defined area where risk can be limited.
Nevertheless, the sellers remain in control. A sustained break below the 200-day moving average at 1.3852 would represent another significant bearish technical development and open the door for further downside momentum.
Conversely, simply bouncing from the 200-day moving average would not be enough to turn the technical picture bullish. It would take a move back above the 100-day and 100-hour moving averages in the 1.3920–1.3930 area to start scaring the sellers and give buyers greater confidence that a more meaningful bottom may be in place.
For now, the stair-step trend remains lower, with the 200-day moving average at 1.3852 shaping up as the next major test.
This article was written by Greg Michalowski at investinglive.com.