Rebounds off key support, as the downtrend remains suspect

• USD/CAD stalls its downtrend, finding support at 1.3489, just above the 200-day Moving Average, and trades 0.14% higher.
• If the pair sustains above 1.3489, it could target resistance levels at 1.3550, 1.3580/90, and the psychological 1.3600 mark.
• A break below 1.3489 could signal a bearish resumption, exposing the 200-DMA at 1.3463 and the 50-DMA at 1.3413.

The USD/CAD downtrend stalls after the US Dollar found its footing, trimming some of its previous losses against the Loonie. Support emerged at around 1.3489, cushioning the pair’s fall and the 200-day Moving Average (DMA) sitting below that level. As of writing, the currency pair exchanges hands at 1.3527, up 0.14%.

From a daily chart perspective, the pair remains upward-biased despite the recent retracement. Sellers failed to drag prices below the September 1 swing low of 1.3489, which could exacerbate a leg up, and the USD/CAD could resume its uptrend in the short term. Hence, the first resistance would be the  1.3550 area, followed by the confluence of the September 12 and 13 highs at around 1.3580/90, immediately followed by the 1.3600 psychological level.

Contrarily, a bearish resumption would happen if the USD/CAD slumps below 1.3489, which could trigger a break in the market structure and expose the 200-DMA at 1.3463. A breach of the latter would expose the 50-DMA at 1.3413, followed by the July 7 daily high turned support at 1.3387.

USD/CAD Price Action – Daily chart

USD/CAD Technical Levels