The USDCAD has been on its own moon mission since early May, rallying from 1.3549 to a new 2026 high of 1.4023 reached yesterday. While there have been periodic pullbacks along the way, the broader uptrend has remained firmly intact. A key reason is that the pair has spent most of the rally above its 200-hour moving average, with only brief dips below the 100-hour moving average. The 200-hour MA has consistently acted as a reliable trend guide, helping to define and sustain the bullish bias.
After reaching the 1.4023 high yesterday, the pair corrected lower and tested a confluence of support. Buyers stepped in near the rising 100-hour moving average, currently at 1.3955, while the price also found support within a key swing area from March and April between 1.3948 and 1.3966. That support zone remains the most important near-term barometer. As long as the price holds above it, buyers maintain the technical advantage.
If sellers are able to break below that support cluster, the next downside target comes into focus at the rising 200-hour moving average, currently near 1.3923. However, with the pair trading around 1.3973, buyers remain firmly in control. Sellers are making an attempt to slow the advance, but they still have significant work to do before shifting the broader bias. Until those key support levels are broken, the path of least resistance remains to the upside.
Of concern going forward is the new trade deal with the US (USMCA). Trump is not a fan of Canada. He thought at one point Canada would be the 51st state. That is not their intention. That dynamic could keep the pressure on the CAD (higher USDCAD).
