March 11, 2025 at 01:08PM
Looking at the USDCAD hourly chart above, the Red Box has played a key role in defining the USDCAD’s trading range, with failed tariff news breakouts on the top and downside unable to sustain momentum for long since early February.
Last Thursday, the price of the USDCAD pair moved below the lower extreme of the “Red Box” at 1.4268, but was quickly rejected. On Friday, the low stalled near low of the area Red Box area, and started the rally higher.
Yesterday’s rally took the price to the higher extreme at 1.44712 near the close, and found resistance sellers willing to step in and defend the key swing area. Buyers turned to sellers again. I warned about the resistance in my post yesterday, saying:
The next major test is the Friday high at 1.44258. A break above that level, and the 1.4448-1.4471 would be targeted. That is the upper boundary of the consolidation range from mid-December to early February (1.4268–1.4471). While tariff-related volatility has led to temporary breaks outside this “Red Box” (see chart) range, last week’s dip below 1.4268 failed to sustain, and Friday’s bounce from that level reaffirmed its importance as support.
The high price reached 1.4472 and stalled.
After rejecting the Red Box resistance, sellers regained control and pushed the pair lower, testing key technical support. The 200-hour moving average (green line) and the 38.2% Fibonacci retracement of the recent February low-to-high move are now in focus at 1.4400 and 1.43916 respectively. A break below these levels would shift momentum further to the downside, and have traders looking toward the 100-hour MA at 1.4365 and then the 50% retracement level around 1.4345.
Conversely, hold support here and the high swing area between 1.4448 to 1.4471 become the resistance zoneonce again.
USDCAD Key Technical Levels
Resistance Levels:
1.44258 – High from Friday
1.4448-1.4471 – Upper boundary of the Red Box, key swing area
1.4472 – Recent high where sellers stepped in
1.4541 – Highs from last week. Potential upside target if 1.4471 is broken
Support Levels:
1.4400 – 200-hour moving average
1.4391 – 38.2% Fibonacci retracement of February low-to-high move
1.4365 – 100-hour moving average
1.4345 – 50% Fibonacci retracement level
1.4268 – 1.4278 – Lower boundary of the Red Box, key support level
A break below 1.43645 could accelerate downside momentum. Holding at the 38.2% at 1.4391 and moving above 1.44258 could give buyers more confidence for another run toward the high of the Red Box.
This article was written by Greg Michalowski at www.forexlive.com.
