The USDCAD — the exchange rate between the US dollar and Canada's dollar, the so-called loonie — has been trending higher since bottoming in early September near 1.3750, and buyers have remained firmly in control of the pair throughout the advance. The rising 100-hour moving average has served as a reliable floor during the climb, keeping the uptrend intact.

Only two hourly bars have traded below that moving average over the stretch in question: one on Wednesday, following the slightly weaker PCE report, and another on Friday, after the weaker-than-expected US jobs report. Both breaks were quickly rejected. Sellers had their opportunities but could not build on them.

The price went on to reach new highs for the year on Thursday and again on Friday. The upward bias carried over into Monday's session, taking the pair to 1.4293. This time, however, buyers ran into a key resistance target — and sellers were waiting for them.

Two technical levels give sellers a place to lean

All trends eventually come to an end, but attempting to pick the top of a strong trend can be an expensive exercise. Sellers generally need a reason to enter the market, along with a clearly defined level that helps them define and limit their risk.

In Monday trading, two separate technical measures pointed to nearly identical resistance overhead:

• 1.42928 — the 61.8% retracement of the decline from the late-January 2025 high to the late-January 2026 low.
• 1.4295 — the swing high from April 7, 2025.

Retracement levels like the 61.8% mark — a ratio derived from the Fibonacci sequence and among the most widely followed in technical analysis — are commonly used to flag where a pullback within a larger move may stall.

Those two levels sit just over two pips apart. That convergence gave sellers a clearly defined area to lean against, with a move above 1.4300 offering a logical reference point for risk.

The price reached 1.4293, stalled, and rotated lower. Sellers have finally enjoyed a victory, but defending resistance is only the first step. To earn a greater reward, they still need to break support below.

The first downside test is holding — for now

The rotation lower has carried the price back into a swing area between 1.4234 and 1.4247, defined by highs from late June and early July. Monday's low has so far stalled inside that zone at 1.4239.

For sellers to take greater control, they need to push below 1.4234 and, importantly, stay below it. Just underneath that level sits the rising 100-hour moving average at 1.42275, adding another significant hurdle.

That moving average matters because buyers have repeatedly relied on it to keep the trend alive. A sustained break below it would signal that this pullback is doing more damage than the brief dips seen last week. Until then, buyers retain a support area to lean against.

Key technical levels

The downside progression for sellers is:

• 1.4234–1.4247 — the swing area containing Monday's low at 1.4239.
• 1.42275 — the rising 100-hour moving average.
• 1.41845 — the 200-hour moving average.
• 1.41297–1.41488 — the next lower swing area.

The 200-hour average, slower to react than the 100-hour, is commonly watched as a broader gauge of short-term trend health.

Each break would hand sellers another piece of evidence that control is shifting. A break that is quickly recovered, however, would raise the possibility of another failed downside attempt.

On the topside, the 1.42928–1.4295 area remains resistance zone to beat. A move above that area — and above the 1.4300 mark — would put buyers back on the offensive.

A top needs confirmation

For newer traders, the takeaway is that a rejection at resistance can start a correction, but it does not by itself confirm a trend reversal. Confirmation has to come from the market, one level at a time.

Sellers who leaned against 1.4293 had a technical reason to enter and a nearby level to define their risk. What they need now is follow-through: breaking the swing area and holding below the 100-hour moving average would strengthen their case, while a move below the 200-hour moving average would add another layer of confirmation.

Buyers, meanwhile, will be watching whether the swing area and the rising 100-hour moving average hold. If they do, the uptrend retains its support structure.

Sellers have defended a key topside target; the next test is whether they can break the floors below it. Absent those breaks, the move remains, according to the analysis, a correction within a bullish trend rather than the start of a sustained decline.

Source: Investinglive