USDCAD fell below its 200-day moving average at 1.39969, marking the first decline under this level since October 7. This shift establishes a downward trend that has continued into the current trading session.
The pair has also dropped beneath the 61.8% retracement level of the rally from September 2024, which is positioned at 1.39465. It is now trading below a swing area between 1.3922 and 1.3930, supporting a bearish outlook.
Next Target And Reversal Conditions
The next target is set at 1.3813, with further support found in a broader zone between 1.3747 and 1.37748. To reverse the current trend, the price must reclaim the 1.3930 swing area and surpass the 61.8% retracement at 1.39465, along with the 200-day moving average.
Currently at 1.3874, buyers need to see a rise of at least 120 pips to alter the technical landscape. Without this upward movement and with key levels breached, sellers maintain dominance in the market.
What’s being described above is a marked deterioration in the technical conditions for the pair, starting with a break beneath its 200-day moving average, which, frankly, often serves as a yardstick for longer-term direction. When price falls below this threshold—especially for the first time in months, as it happened here—it often brings in momentum from those who track broad trend indicators. Combine that with a dip below the 61.8% retracement of the prior upswing, and what we’re looking at is not just a passing weakness, but a gathering wave of pressure to the downside.
Current Market Momentum
The fact that the market also sliced through the swing region around 1.3922–1.3930 only adds to the sellers’ conviction. Retracement levels like the one at 1.39465, when broken convincingly, tend to shift positioning and sentiment quite rapidly, particularly when confirmed by other indicators aligning in the same direction.
For derivative traders who track these levels day in and day out, this scenario signals an acceleration of downward momentum, rather than a technical pause or consolidation. The current trading level near 1.3874 means the price is well parked under key resistance markers. Our broader read on this suggests that without a forceful recovery above that prior swing range, the larger pressure remains intact, and short positions continue to have the upper hand.
There’s still room until the price meets the next familiar floor; we’re watching the 1.3813 handle as the next logical step. If that begins to give way, then eyes will likely shift to the wider zone closer to 1.3750, where multiple price reactions have clustered in the past. Each of these steps potentially invites fresh momentum plays.
Retracement strategies or reversals are a harder sell right now. Morgan, for instance, laid out that recovery isn’t simply about ticks on the screen—it would take a deliberate move back above 1.3930 and then towards 1.3950 to spark any sustained buying interest from systematic models. If that’s not forthcoming, it leaves days or even weeks of bias skewed one way. And it’s rarely wise to fight the flow.
So we’re watching for signs of exhaustion—volume dips, failed new lows, that sort of thing—but until those show up, it’s best to stick with where direction has already proven itself. The levels that matter are clear, and those who wait for more confirmation may find themselves arriving too late if an earlier support cracks.
