The USDCAD is trading modestly lower on the day, but notably is not seeing aggressive selling despite the weekend developments in the Middle East. As the conflict appears to be moving toward a resolution, market attention may shift back to trade negotiations. That could put renewed focus on U.S.-Canada relations and, in particular, discussions surrounding a potential rewrite of the USMCA agreement. Given the recent tensions between the two administrations, trade headlines could once again become an important driver for the pair.
From a technical perspective, sellers had their opportunity during the Asian-Pacific session. The price did briefly move below its rising 100-hour moving average, currently at 1.39599, but downside momentum stalled ahead of a key swing area between 1.3948 and 1.3966. The inability to break below that support zone, along with the 200-hour moving average near 1.3937, encouraged buyers to step back in.
Since then, the pair has rebounded above both the 100-hour moving average and the upper boundary of the swing area. For sellers to regain control in the short term, they will need to push the price back below the swing area and ultimately beneath the 200-hour moving average at 1.3937
