The recent bullish advance in USDCAD was interrupted after reaching a high of 1.4401. Momentum could not be maintained as the price fell below key moving averages, prompting a shift from buyers to sellers.
Currently, the price has retraced its gains, moving below the 100 hour MA at 1.4327 and 200 bar MA on the 4-hour at 1.4326. This marks a complete reversal of the day’s earlier performance.
The Price Decline May Be Easing
The price decline may be easing. A move above 1.43454 could indicate a reduction in selling pressure, while a drop below 1.4326 would suggest stronger selling control. Volatility is influenced by various factors, including ongoing tariff discussions.
This shift in direction reflects a loss of upward momentum after testing a notable high. A failure to sustain levels above previous price peaks has led to a transition from buying interest to selling pressure. Key moving averages, which had previously provided support, were broken, reinforcing a more cautious sentiment.
These developments mean traders should take a measured approach when evaluating potential entries. With prices now trading below both the 100-hour moving average and the 200-bar moving average on the four-hour timeframe, earlier bullish sentiment has eroded. When price action moves back through these averages after previously holding above them, sentiment often turns more defensive, leading to a greater willingness to sell into rallies rather than buy on dips.
Short Term Areas Of Interest
There are now two short-term areas of interest. Should the price rise above 1.4345, a reduction in sellers’ dominance could be considered. Buyers gaining enough momentum to push past that threshold may indicate a shift in sentiment, though follow-through would still need to be monitored closely. Conversely, a push below 1.4326 would suggest that sellers have maintained control, possibly leading to a deeper retracement. The market has already demonstrated its ability to reverse quickly, so respecting these technical areas remains essential for short-term decision-making.
Price volatility has not developed in isolation. Ongoing tariff discussions continue to shape market sentiment, adding another layer of uncertainty. The currency pair has already shown responsiveness to changing trade policies, and any fresh developments could quickly tilt sentiment once again. Watching for shifts in rhetoric and potential policy changes will be just as important as monitoring key technical zones.
Momentum has clearly slowed, and where price moves next will depend on whether buyers can regain lost ground or if sellers extend control further. Steps to manage risk appropriately should remain in focus, particularly given the potential for sharp reactions to external events.
