The USDCAD moved sharply lower through April but has turned back to the upside in May. The rebound this month pushed the pair above two key technical levels — the 61.8% retracement of the decline from the March 31 high at 1.38068 and the 200-day moving average at 1.3813. However, buyers have so far struggled to sustain momentum above that resistance zone, putting the breakout attempt in jeopardy.
On Friday, the pair reached a high of 1.3822, and today’s rally stalled at 1.3820 before rotating lower once again. The current price near 1.3805 is now trading just below the key 61.8% retracement level, keeping the market at an important technical crossroads. If sellers are going to reassert more control, this is the area to do it. Both the 61.8% retracement and the 200-day moving average are widely watched technical barometers, and failure to hold above them would weaken the bullish case.
For sellers to gain stronger downside momentum, the pair would need to move back below the rising 100-hour moving average at 1.3777. Last Wednesday, the price did break below that moving average for the first time since reclaiming it on May 6, but sellers could not sustain momentum toward the 200-hour MA and 100-day MA near 1.3722. The low that day reached 1.3730 before buyers stepped back in aggressively. By Thursday, the pair had regained the 100-hour MA with momentum and the buying resumed.
If buyers can reestablish control above the 200-day moving average and break above the recent highs at 1.3822–1.3823, it would give them the technical green light for a further move higher
