The USDCAD dropped sharply after U.S. Commerce Secretary Lutnick suggested that tariffs on Canadian goods would be delayed or not enacted, prompting sellers to take control.

Technically speaking, the price action was supportive of a move lower. Today's high stalled at a key resistance level near the 200-hour moving average (1.4373) before reversing lower. The decline pushed the pair below the 61.8% retracement of February’s trading range at 1.4299 and broke out of the consolidation range ("Red Box") that had contained most of the pair’s price action from mid December until volatility surged as a result of tariff headlines in late January and early February.

February saw brief moves outside the Red Box in both directions, including earlier this week. Now, sellers have a renewed opportunity to assert control.

Although the bias has shifted to the downside, the tariff-related headlines likely will continue to drive market sentiment, creating near-daily fluctuations.

As a result, a move back inside the Red Box, and above the lower swing area at 1.4279, would shift bias back to buyers and there likely is to be more buying on the failed break.

Conversely, staying below that level keeps sellers in control, with key downside targets at 1.4246, followed by the 100-day moving average at 1.41874. A further break could bring the February lows at 1.4166 and 1.4150 into focus.