The USD/CAD gapped lower over the weekend following news that Scott Bessent would be named Treasury Secretary under Trump. However, the initial decline lacked follow-through, and the pair resumed its upward momentum.
Key Levels Tested
- The price rebounded above the August 2024 high at 1.39458 and the 2022 high at 1.39785, signaling bullish intent.
- Momentum carried the pair to and briefly above the 200-hour moving average (MA) at 1.4002 and the psychological 1.4000 level, but these gains were unsustainable, prompting a pullback.
Current Position
The pair has now retreated to a zone near the 100-hour MA at 1.3969 and the 100-bar MA on the 4-hour chart at 1.39573. This places the price back within the range defined by the 2022 high (1.39785) and the August 2024 high (1.39458).
Buyer and Seller Stand-Off
- Sellers: Tested levels below the August 2024 high at 1.39458 but failed to maintain control.
- Buyers: Attempted to sustain momentum above the 2022 high at 1.39785, but gains were limited.
Both sides have made their moves, but neither has gained a decisive edge. Traders should now watch for a break outside the 1.39458–1.39785 range. A sustained move in either direction could signal the next momentum-driven shift.
This article was written by Greg Michalowski at www.forexlive.com.
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