The USDCAD has experienced a sharp decline and is currently testing a swing area between 1.3553 and 1.35638. The 200-bar moving average on the 4-hour chart is located within this range at 1.35594. The price dipped to 1.3550, just below the low of the swing area, but only saw a slight pause so far. Nevertheless, if the level holds, traders will eye the 50% midpoint of the range since the March high at 1.35808 as an upper resistance target. Get above that level and buyers can breathe a sigh of relief.
On the other hand, a drop below 1.3553 with momentum would pave the way for further declines, with the 100-day moving average at 1.35261 as the next significant target. Earlier this week - on Monday and into Tuesday - the price found support near the 100-day moving average level before ultimately breaking higher.
On topside this week, the upward movement extended towards the 61.8% retracement of the decline from the March high at 1.36472, as well as a swing area between 1.3650 and 1.3665. Today's high reached 1.3667, just above the top of the swing area, before reversing and trending downwards.
So overall, resistance against the swing area/retracement level, and support against a swing area and MA level is defining much of the trading range