- USD/CAD recovery meets strong resistance
- Holds steady amid rising commodities and Fed policy guidance
- Momentum indicators reflect wait-and-see stance
is trading nearly unchanged just below the 1.3700 level, with the Canadian dollar under pressure as a firmer offsets support from rising oil prices and data showing that Canada’s trade deficit has narrowed. Traders are also awaiting key economic releases due later in the day from both economies to assess the outlook for monetary policy.
The momentum indicators reflect stabilising conditions. The RSI is flatlining around the neutral 50 threshold, while the MACD has turned above its red signal line but remains below zero. Meanwhile, the stochastics are easing at overbought levels, helping maintain the recent recovery from multi‑month lows and keeping the price above the key 20‑day simple moving average (SMA).
If this firmness continues, a break above the key 1.3700 resistance, which has capped gains since late January, and above the 50‑day SMA positioned just below the 38.2% Fibonacci retracement of the November-January decline at 1.3734, could unfold. Such a move may open the way toward the 200‑day SMA near the 50% Fibonacci level at 1.3811, which is currently aligned in a death‑cross formation with the 50‑day SMA.
Conversely, initial support is provided by the 20‑day SMA just below the 23.6% Fibonacci level at 1.3638, followed by 1.3575 and the four‑month low near 1.3471 reached earlier this month.
All in all, USD/CAD remains muted for now, with its recovery from four‑month lows facing strong resistance as traders await fresh catalysts. That said, holding above the key 20‑day SMA could allow room for an extension toward the monthly highs near the 50‑day SMA at 1.3734.
