FX.co ★ Quee | USD/CAD

ANALYSIS OF USD/CAD PAIR. The USDCAD pair on the hourly timeframe currently exhibits a well-established and persistent downtrend that has been unfolding since early April, as illustrated by the steep slope of the red moving average (likely a 50-period or 100-period simple moving average). Price action has consistently remained below this moving average, confirming bearish momentum and underlining strong downside pressure. Following a sharp break beneath the 1.3970 support zone around April 8–10, the pair initiated a pronounced leg lower, forming a sequence of lower highs and lower lows—a classic hallmark of a dominant bearish structure. Volume analysis reveals noticeable spikes during the strong impulsive drops, signifying active selling participation likely driven by institutional players rather than retail traders. After reaching lows near 1.3780, price attempted multiple minor pullbacks; however, each retracement was capped below the dynamic resistance of the moving average, reinforcing the integrity of the downtrend. Notably, psychological round levels such as 1.3900 and 1.3800 have played key roles as interim resistance and support, respectively. The area around 1.3830, which coincides with current price action, is now acting as a critical equilibrium zone, where previous support has turned into resistance, suggesting that sellers are defending this level aggressively. Moreover, the inability of buyers to sustain moves above the moving average points toward the market's hesitancy to reverse, implying a higher probability of continuation to the downside unless significant buying volume emerges.

Structurally, the price remains compressed within a horizontal consolidation range between roughly 1.3760 and 1.3900 after the sharp declines, suggesting a possible accumulation phase or a bearish continuation pattern (such as a bear flag or descending triangle) depending on upcoming price behavior. The narrow price action combined with decreasing volume during the sideways movement typically precedes a strong breakout; given the broader trend bias, a downward breakout appears more probable unless invalidated by a strong bullish catalyst. Immediate support lies at 1.3760, the recent swing low, a breach of which could expose further downside toward 1.3700 or even deeper psychological levels like 1.3650. On the upside, reclaiming the 1.3900–1.3920 area with a sustained break and retest would be necessary to challenge the bearish thesis, potentially opening a corrective rally toward 1.3970 or higher into the 1.4030 supply zone. From a moving average perspective, the red line acts not only as dynamic resistance but also as a visual guidepost for institutional shorting interests; each touch and rejection off the moving average adds weight to the bearish pressure. Traders should remain cautious of potential false breakouts given the liquidity-rich zones near 1.3800 and 1.3900, where stop-hunting wicks may occur before a genuine directional move manifests. Overall, the trading bias remains firmly bearish unless clear evidence of structural reversal—such as a break of the moving average with bullish volume and a series of higher lows—emerges. Smart money appears to be accumulating short positions rather than preparing for a reversal at this stage, suggesting traders should look for shorting opportunities on rallies rather than attempting premature bottom-picking.