The USDCAD extended its rally yesterday, surging higher into and following the FOMC rate decision. The pair has been in a well-defined uptrend since bottoming near 1.3549 on May 1 (the high prices today reached 1.4134), with buyers maintaining control for most of that period. Since May 7, the price has traded primarily above its 100-hour and 200-hour moving averages, reinforcing the bullish bias. While there were brief breaks below those averages on May 28 and 29, buyers quickly regained control, pushing the pair back above both moving averages on June 1 and keeping it there ever since.
As the trend has strengthened, the price has moved further away from its key support levels. The 100-hour moving average currently sits at 1.4013, while the 200-hour moving average is at 1.3983. As long as the price remains above these rising averages, buyers remain firmly in control. For sellers to gain a more meaningful foothold, the pair would need to break back below those technical levels.
Trending markets often move farther and last longer than traders anticipate, and USDCAD has been a textbook example of that behavior since the May low. However, the latest push higher has now reached an important resistance zone between 1.4130 and 1.4144, an area defined by swing highs dating back to November 2025. Today's high reached 1.4134 before stalling and backing off, with the pair currently trading near 1.4117.
For risk-focused traders, this creates an interesting setup. The trend remains bullish, but the market is also testing a key resistance area after an extended advance. Traders looking to fade an overextended move should only do so where risk can be clearly defined and limited. The 1.4130–1.4144 resistance zone offers that opportunity. If the price breaks above the area, the trade idea is wrong, and traders should exit—and potentially even consider reversing into the prevailing uptrend. If the resistance holds, however, the pair has room for a deeper corrective pullback given its stretched conditions.
In the video above, I outline the technical levels driving the current move higher and discuss what would need to happen on any downside correction for sellers to begin regaining control and confidence.
