FX.co ★ USD/CAD

USD/CAD has been catching my attention recently, especially around the 1.3980 level. This price matches the 38.2% Fibonacci retracement on the four-hour chart, making it an important technical area to watch. Whenever a key Fibonacci level aligns with previous price reactions, I usually consider it a strong candidate for the next major move. That is exactly why I believe this level could play a significant role in determining the pair’s short-term direction. A few sessions ago, the pair moved lower and managed to break below the 23.6% Fibonacci support. At first, it looked like sellers were ready to extend the decline, but the downside momentum faded before the price could reach the 38.2% retracement. Instead of continuing lower, the market found support around the 200-period moving average. After bouncing from that area, the price returned to test the level once again, showing that both buyers and sellers are still fighting for control. Even though buyers managed to defend the moving average, I still think another move lower is possible before the next bullish leg begins. In my view, the market could revisit the 1.3980 zone to complete the current correction. If that support holds and buying pressure returns, it would provide a stronger foundation for a fresh upward move. Corrections often help remove weak positions from the market, allowing the main trend to continue with more confidence.

If the rebound starts from that level, I will be watching the resistance around the 14.6% Fibonacci level. A successful break above that area would strengthen the bullish case and confirm that buyers have regained momentum. At the same time, the internal price structure could develop into a larger corrective pattern that eventually targets the 61.8% Fibonacci projection. This would fit well with the broader technical picture that has been developing over the past few weeks. My initial expectation was for USD/CAD to continue climbing toward the weekly target near 1.4300 without much difficulty. However, the rally lost momentum and was interrupted by a correction before reaching that objective. While this may have delayed the bullish scenario, I do not see it as a reason to abandon the overall outlook. Pullbacks are a normal part of trending markets and often create better entry opportunities for traders who remain patient. At this stage, I still believe the broader trend favors the upside once the current correction comes to an end. The key is whether buyers can defend the support around 1.3980 and build enough momentum for another rally. If that happens, the recent weakness will likely be remembered as nothing more than a temporary pause before USD/CAD resumes its climb toward higher levels, with the weekly target around 1.4300 remaining a realistic objective.