- October 23, 2025
- Posted by: EWGFX
- Category: Technical analysis
The USDCAD opened the North American session on a firm note, extending its overnight advance and briefly moving above the 38.2% retracement of the 2025 trading range at 1.40176. That initial break signaled an attempt by buyers to regain control following several sessions of sideways-to-lower trading.
However, the rally quickly ran into a strong technical ceiling — the converging 100-hour and 200-hour moving averages, both clustered near 1.4030. This dual resistance zone proved difficult to overcome, with sellers stepping in decisively. The rejection at that level marked a key turning point in the session, shifting intraday momentum to the downside.
The move lower accelerated after U.S. Energy Secretary Wright confirmed that the government was actively purchasing oil for the Strategic Petroleum Reserve, calling it “a great time to buy oil.” The announcement sparked a sharp rise in crude prices, boosting the Canadian dollar — a commodity-linked currency — and pressuring USDCAD lower.
The pair has since fallen to a new session low near 1.3984, with focus now turning to the next key support zone — the top of a prior swing area between 1.3971 and 1.39315, which served as a base from October 2–9. This area may attract initial buying interest, but a decisive break below 1.3971 would undermine the short-term bullish bias and open the door for further downside momentum.
If that occurs, traders will shift their attention to the 200-day moving average at 1.39369, a critical longer-term trend indicator. A move below this level would strengthen the case for a deeper corrective decline in the pair.
In summary, 1.4030 to the upside and 1.3971 to the downside define the near-term battle lines for USDCAD. As long as the pair trades below the dual hourly moving averages, sellers retain short-term control; a break above would instead revive bullish momentum and refocus attention on higher retracement levels.