The USDCAD continues to show a firm upside bias, but traders are facing a critical test as price action presses against key resistance levels. The pair has already extended above both the high from last week and the high from yesterday’s trade near 1.3957. That break drew market attention toward the next significant hurdle: the 200-day moving average, currently at 1.3964.
This level carries particular weight because the last time the USDCAD traded above its 200-day moving average was back in April of this year. Reclaiming and holding above such a long-term indicator would not only signal a meaningful shift in momentum but would also add conviction to the bullish case. For short-term traders, this is the immediate battleground—whether buyers can maintain pressure and force a clean break, or whether sellers will lean against it and cap the rally.
If the pair can sustain a move above 1.3964, the door opens for a run toward the next resistance target at 1.3978. That level is notable because it marks the upper bound of a swing area between 1.3928 and 1.3978—an area that has repeatedly acted as both support and resistance in recent months. A clear break through the top of that band would leave little in the way of resistance until higher retracement levels come into play.
The next major upside marker sits at the 38.2% retracement of the decline from the 2025 high (1.40176), which was set back on February 3. Importantly, that retracement level is not just a standalone technical milestone—it also aligns with swing highs going back to May, adding confluence and increasing its significance. A push through this region would likely attract additional momentum buying and strengthen the bullish bias further, potentially setting up a larger upside extension.
For now, traders are watching closely what happens at the 200 day moving average
