FX.co ★ USD/CAD

USD/CAD Daily Technical & Fundamental Analysis – Approaching Major Demand Zone Hi Everyone, Today I am sharing my technical and fundamental outlook on the USD/CAD daily chart. Over the past few weeks, the pair has experienced a heavy bearish sell-off from the high-timeframe resistance levels, and price is now trading near 1.3766, heading straight toward a key support and demand area. Fundamental Overview On the fundamental side, USD/CAD is facing pressure due to two main macro factors: Crude Oil Prices: Crude oil has seen strong upward momentum recently due to global supply dynamics and geopolitical developments. Since Canada is a major oil exporter, higher oil prices provide solid support to the Canadian Dollar (CAD). Interest Rate Expectations & Central Banks: The US Dollar (USD) is consolidating as market participants evaluate economic data and interest rate expectations from the Federal Reserve. Meanwhile, the Bank of Canada (BoC) maintains a cautious stance on inflation, keeping CAD relatively resilient compared to the USD. Daily Technical Analysis & Chart Breakdown Looking at the daily chart, we can observe several clear market structures: Major Resistance Zone & Bearish Order Block: The top red zone at 1.4200–1.4300 acted as a major multi-month resistance. Price swept the top liquidity, formed a strong rejection, and created an Unmitigated Bearish Order Block around the 1.4050–1.4100 region. This area remains a heavy supply zone for any future upside pullbacks. Liquidity Sweeps: Throughout late 2025 and mid-2026, price repeatedly tested the 1.4100 level, sweeping Sell-Side Liquidity before taking a sharp dive downward. Current Price & Immediate Support Zone: USD/CAD is currently trading around 1.3766. The immediate blue support zone sits at 1.3600–1.3680, which also contains an Unmitigated Bullish Order Block. Major Demand Zone & Buy-Side Liquidity: Below the support zone lies a long-term Buy-Side Liquidity line near 1.3500 and a massive green Demand Zone (1.3400–1.3500). This area has consistently acted as a major floor for USD/CAD over the past year.

My Trading Strategy & Execution Possibilites Because price is approaching a major support zone after a long bearish move, I am not interested in selling at the very bottom of this drop. Instead, I am watching for two potential scenarios: Plan A: Bullish Reversal at Demand Zone (Preferred Buy Setup) Entry Area: Wait for price to drop into the 1.3600–1.3650 Bullish Order Block or test the 1.3500 demand zone. Confirmation: Daily or H4 bullish confirmation candle (such as a Pinbar, Bullish Engulfing, or Liquidity Sweep wick). Targets: First target at 1.3900, secondary target at the 1.4050 Bearish Order Block. Invalidation (SL): Daily close below 1.3450. Plan B: Continuation Sell on Retracement Entry Area: If price gives a short-term pullback back up to the 1.4000–1.4050 Bearish Order Block. Targets: 1.3760 and 1.3600. Invalidation (SL): Above 1.4120. Final Thoughts While the immediate momentum on USD/CAD is bearish, selling right above a major Unmitigated Bullish Order Block at 1.3600–1.3650 offers poor risk-to-reward. Patience is key—waiting for price to react at the blue support zone or green demand zone will offer a much cleaner trade setup