The Canadian CPI data came in slightly hotter than expected, giving the CAD a boost and pushing USDCAD lower. From a technical perspective, the pair has broken below both its 100-hour and 200-hour moving averages, now at 1.4037 and 1.40278 respectively. Those levels have flipped to near-term resistance.
As long as sellers can keep the price below the moving averages, downside momentum remains in play. A move back above would invalidate the short-term bearish bias.
Last week, the USDCAD had extended higher from its mid-September rally, briefly trading above the 38.2% retracement of the 2025 range at 1.40212 and the swing zone between 1.4010 and 1.4026. The current break lower estimate taken the price below the moving averages but not below the low of the swing area at 1.4010. There is work to do if the sellers are to take more control.
The video above details the setup: sellers are attempting to reclaim control after weeks of steady buying. The key question now — can they sustain the momentum below the broken support zone?
