USD/CAD has been on its own lunar mission since early May, rising from 1.3549 to a new 2026 high of 1.4023 reached yesterday. Although there have been periodic pullbacks along the way, the broader uptrend has remained intact. The main reason is that the pair spent most of the rally above the 200 hourly moving average, with only brief declines below the 100 hourly moving average. The 200 hourly moving average has consistently acted as a reliable trend guide, helping to identify and maintain a bullish bias.
After reaching a high of 1.4023 yesterday, the pair corrected lower and tested the support confluence area. Buyers entered near the bullish 100-hour moving average, which currently stands at 1.3955, while the price also found support within the key swing zone from March and April between 1.3948 and 1.3966. This support area remains the most important near-term metric. As long as the price remains above it, buyers retain the technical advantage.
If sellers can break below this support group, the next downside target will come into focus at the bullish 200 hourly moving average, which is currently located near 1.3923. However, with the pair trading around 1.3973, buyers remain firmly in control. Sellers are trying to slow the advance, but they still have significant work to do before the broader bias changes. Until these key support levels are broken, the path of least resistance remains to the upside.
Of future concern is the new trade agreement with the United States (USMCA). Trump is not a fan of Canada. It was thought at one time that Canada would be the 51st state. This is not their intention. This dynamic could maintain pressure on the Canadian dollar (USD/CAD rises).
