Over the past 24 to 48 hours, the USD/CAD currency pair has remained under pressure, falling below yesterday’s closing price of 1.37002 and reaching near a six-month low of 1.3655. The US dollar has been declining for six consecutive trading sessions amid broad weakness, while the Canadian dollar is gaining strength supported by improved market risk sentiment and stable oil prices, causing the USD/CAD to slide.

The key driver behind this move is the easing of US policy uncertainties, particularly relief in geopolitical tensions, which has boosted market confidence. Moreover, with upcoming interest rate decisions from the Bank of Canada (BoC) and the Federal Reserve (Fed), market participants are closely watching monetary policy divergences between the two countries, steering fund flows towards the Canadian dollar.

In relatable terms for the average investor, the recent USD/CAD decline reflects a weaker US dollar overall and a stronger Canadian economic outlook, especially as geopolitical risks recede and energy prices remain steady. Investors holding or considering exposure to this pair should keep a close eye on forthcoming rate decisions and geopolitical developments, as these will continue to dictate price volatility.

Daily Chart

On the daily chart, USDCAD remains firmly entrenched in a downward channel, consistently failing to break above the 50-day moving average (~1.38096) and 200-day moving average (~1.3833), indicating persistent bearish pressure. The Bollinger Bands are widening downward, reflecting increased volatility and selling momentum. The MACD indicator is in negative territory, reinforcing the bearish trend. Price action reveals steady daily declines, with the pair now approaching a critical support zone near 1.3650, where traders should watch for potential reaction or bounce opportunities.

1H Chart

The hourly chart covering the past 3-5 days shows a short-term consolidation pattern between roughly 1.3670 and 1.3750. Short-term moving averages are sloping down, with the 5-hour MA exerting resistance on price. The narrowing Bollinger Bands suggest diminished momentum, while the MACD is attempting a modest recovery below zero but hasn’t signaled a bullish crossover yet. Recent bearish engulfing candlestick signals hint at possible continuation of downside or consolidation, urging traders to be cautious with any short-term rebounds.

Technical Trend:  Overall trend: Decisively bearish with strong technical and fundamental confirmation. Short term shows volatile sideways to consolidation within the downtrend.

Technically, USDCAD is testing a key support level around 1.3650 with strong downside momentum intact, though short-term MACD divergence points to a possible minor corrective bounce. Both the daily and hourly charts confirm a bearish trend with volume staying relatively subdued, suggesting the market is awaiting fresh catalysts. A decisive break below 1.3650 could accelerate downside risks, pushing toward last December’s lows near 1.3540. Traders should watch for candlestick reversal patterns like engulfing or hammer for potential entry or exit cues.

Today’s economic calendar features German Ifo Business Climate and Polish Retail Sales releases; however, these have limited direct impact on USDCAD. The most relevant event is the US Durable Goods Orders at 16:00 GMT+1. Stronger-than-expected US data could support the USD and lift USDCAD, while weaker data would likely extend current bearish momentum. Overall, no major Canada-specific events today, so market focus remains on US data and geopolitical developments.

Resistance & Support

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