The USDCAD broke below its 200-day moving average at 1.39969 during yesterday’s session — the first drop below that level since October 7. That break marked a major shift in bias and set the stage for continued downside momentum, which has extended into today’s trading.

The pair has also moved below the 61.8% retracement of the rally from the September 2024 low, which comes in at 1.39465, and is trading beneath a key swing area between 1.3922 and 1.3930. These breaks confirm a technical shift in favor of sellers.

The next major target comes in at 1.3813 (see red numbered circles). Below that, a broader swing zone dating back further on the chart lies between 1.3747 and 1.37748 (not shown in the image above).

What would give buyers renewed confidence?

At a minimum, the price would need to:

• Reclaim the 1.3930 swing area

• Break back above the 61.8% retracement at 1.39465

• Ultimately, push through the 200-day moving average at 1.39969

With the pair currently trading around 1.3874, buyers would need a move of at least 120 pips higher to begin shifting the technical picture (with a move back above the 200 day MA). Absent that, and despite a potential corrective rally, if the price cannot get above the MA level, the buyers are not winning/the sellers are still in play.

In short, this week’s break has snapped a multi-month consolidation range, and with key levels broken along the way, the sellers remain firmly in control.