The narrative for USDCAD hasn’t changed much—I’ve been saying it for a while now: we’re stuck in the “Red Box.” That range has contained most of the trading activity since mid-December. Yes, there have been moves outside of it, but they’ve mostly failed to stick.

At the end of January and into early February, price broke above the Red Box on the back of Trump’s initial tariff threats targeting Canada—specifically as a result of fentanyl and border security. But Canada responded, the flow of drugs and people slowed at the border, and those tariff threats were delayed, sending the USDCAD back down quickly.

Optimism briefly took hold, pushing price below the lower extreme of the Red Box, but that too failed.

Since then, we’ve had a couple of tariff scares, which pushed the pair back above the Red Box highs around March 3 and March 12—but those breakout attempts also fizzled. This week, price dipped below the Red Box again and tested the break of the rising 100-day moving average and that failed quickly. Now the 100-day MA is aligned with the lower boundary of the Red Box at 1.4269, incrasing that levels importance.. If price breaks and holds below it, bears take full control.

To the upside now, closer resistance comes from the 200- and 100-bar moving averages on the 4-hour chart, currently at 1.43175 and 1.4344, respectively. Today’s high hit 1.4332, just below the 100-bar MA. Last week, a similar attempt above the 100-bar MA quickly failed. That leaves sellers holding more control in the short term.

That said, price is still stuck inside the Red Box and above the 100-day MA, so the bears haven’t sealed the deal yet. The technical picture still needs to be resolved.

On the fundamental side, the market's reaction to tariff threats has been increasingly muted. Each spike higher on tariff news has been lower than the last—traders are simply less rattled. That could change, but for now, there’s a sense that progress is being made. Canadian officials are pushing back, and Trump has commented on “progress.” Still, the threat of auto tariffs and the push for U.S.-made parts remains a concern.

Meanwhile, the Bank of Canada has been cutting rates in an effort to soften the impact of these pressures.

What is clear, is the market may be up and down volatile, the technicals will help tell the story. THe 1.4269 level is increasing in importance. The 100 and 200 bar MAs are more important over the last two weeks with one failed break (1.4344 is close resistance). Look for the break and run.