The USDCAD is extending higher after recovering from earlier weakness at the start of the trading day. As outlined in an earlier post, the pair first moved back above its 100-hour moving average near 1.3600, but buyers have now taken the next important technical step with a break above the 200-hour moving average at 1.3631 (Green line on the chart below).
That level is especially important because it also marks the upper boundary of a key swing area between 1.3600 and 1.3631 (see red numbered circles). The move above that zone improves the short-term technical picture and shifts the focus back toward higher upside targets.
With the price now trading above those levels, buyers are regaining some short-term control. However, there is still work to do. The first objective is to hold above the broken swing area between 1.3620 and 1.3631. If buyers can keep the price above that zone, it would confirm the breakout and give the market a stronger foundation for further gains.
Conversely, a move back below the area would turn the latest breakout into a failed break — a development that would likely hand control back to the sellers.
On the topside, the next target comes in near 1.3667. Above that, resistance is more layered and extends toward the 1.3708 to 1.3715 region (highlighted by the green numbered circles on the chart above). That area also sits just below the falling 100-day moving average at 1.3722. As the moving average continues to decline over the next few sessions, it will move even closer to that resistance zone, increasing its technical importance.
For now, buyers are making a play. The key question is whether they can hold above the broken resistance and keep the upside momentum going.