On the daily chart below for USDCAD, we can see that the big rally we saw in the past weeks stalled at the 1.3664 resistance, and after a little consolidation, it broke down and made a huge selloff back towards the low at 1.33. If we look at this timeframe, the pair has been stuck in a big range since October 2022. This is mainly because there wasn’t a big policy divergence between the Fed and the BoC, so both the currencies Currencies Currencies are a typically a form of money in wide circulation, being the primary medium of exchange with respect to buying and selling goods and services. These are often issued by a specific government or collection of governments, by way of paper notes and coins. Other forms of currencies include previous metals such as gold and silver, and digital currencies such as Bitcoin. Currencies serve as a backbone of the country’s or countries’ economy, due to the perception of value held by the popu Currencies are a typically a form of money in wide circulation, being the primary medium of exchange with respect to buying and selling goods and services. These are often issued by a specific government or collection of governments, by way of paper notes and coins. Other forms of currencies include previous metals such as gold and silver, and digital currencies such as Bitcoin. Currencies serve as a backbone of the country’s or countries’ economy, due to the perception of value held by the popu Read this Term were strong.

Due to this fast fall, the price is now overstretched as depicted by the distance from the blue short period moving average. We can generally see a pullback or consolidation until the price and the moving average converge. Lately, the USD has been weak due to the market expecting the Fed to pause in June and start cutting rates before the end of the year, but the recent economic data suggest that this is not yet a done deal.

USDCAD technical analysis

On the 4 hour chart below, we can see that the price has bounced near the 1.33 handle and it looks like the buyers are in charge for now. A break above the 1.34 handle should give the buyers more conviction to extend the rally and possibly target the 1.3553 resistance. Tomorrow, we have the US CPI report and it’s likely that a hot report will give the USD a boost sending the pair higher, while lower than expected data should give the sellers control again and lead to pair to test the major support at 1.3225.

On the 1 hour chart below, we can see that there was a divergence between the price and the MACD falling into the 1.33 handle. In such instances, the price generally pulls back or reverses. Here we can see that at the moment we have a pullback towards the 1.3390 swing high level. If the buyers manage to break through that resistance, the next target will be the 38.2% Fibonacci retracement level at 1.3440. For the sellers, on the other hand, a break below the 1.3362 level should offer another fall towards the 1.33 handle.