- USD/CAD oscillates near the 1.3890-1.3930 resistance zone, tracking three‑month highs.
- Retraces 61.8% of the pullback from multi‑year highs.
- RSI and stochastics signal stalled upside momentum.
USD/CAD has been oscillating within the 1.3890-1.3930 resistance territory since the beginning of the week, repeatedly testing the upper boundary after a brief break to the three‑month and year-to-date high of 1.3965 on Tuesday.
If the pair manages to break decisively above this strong resistance zone – and further above the ytd peak, which also coincides with a major December support region – it would signal a continuation of the broader uptrend that has been forming higher lows since the January 30 bottom. The next resistance hurdle sits at the December 2 swing high near 1.4015, before the pair potentially heads toward the multi‑year peak near 1.4140.
That said, the momentum indicators show the upside stalling. The MACD remains in positive territory, but the RSI has failed to firmly enter overbought territory. Further, the stochastics are also ticking lower from overbought levels, pointing to fading momentum.
A decisive dip below the 61.8% Fibonacci retracement of the November-January pullback at 1.3890 could be followed by a break under the 200‑day simple moving average (SMA) near the 1.3800 psychological level, shifting the outlook to bearish. This would be reinforced by subsequent breaches of the upward‑sloping 20‑ and 50‑day SMAs at 1.3770 and 1.3690, respectively.
Summing up, USD/CAD is attempting to clear a key resistance zone, and a confirmed break above it would signal a resumption of the broader upside trend. However, another rejection from this region would likely keep the pair in consolidation, as long as price action remains supported by the 61.8% Fibonacci level.
