**USD/CAD Technical Outlook: Bears Miss Their Shot Amid Bullish Momentum Shift**
*Based on original reporting by Greg Michalowski on ForexLive, with expanded technical and market context.*
The USD/CAD currency pair continues to exhibit dynamic price movements, as recent technical signals suggest that bearish momentum is waning and bulls are beginning to reassert control. After a brief dip lower last week, sellers failed to breach key support levels decisively, leading to a shift in sentiment in favor of the bulls.
This article will provide an in-depth technical analysis of the USD/CAD pair, examining key price action zones, support and resistance levels, momentum indicators, and broader market fundamentals influencing the Canadian dollar. Drawing on the original insights of Greg Michalowski from ForexLive, we further supplement the coverage with additional details to build a comprehensive 1000-word technical overview.
## Overview of Recent USD/CAD Price Action
The USD/CAD pair experienced a notable decline after peaking in mid-April 2024, driven in part by a resurgence in crude oil prices, which tend to support the Canadian dollar. However, despite the downward pressure, the pair failed to decisively break below the 1.3600 range, a critical support zone that has frequently acted as a pivot point in recent months.
As traders closed out the week of April 15, 2024, bearish pressure briefly pushed the pair into the lower range, testing the confluence of moving averages and horizontal supports. This was seen by technical analysts as a potential trigger point for a deeper correction.
According to Greg Michalowski:
> “The sellers had their shot at pushing the USD/CAD pair lower but failed to hold prices below the key support zone.”
This failure, driven by a lack of sustained momentum and increasing buying interest around the support zone, laid the foundation for the subsequent rebound.
## Key Technical Levels to Watch
### Support Zone: 1.3600–1.3615
– This level held firm last week following a slight break below, which proved to be a false breakdown.
– The area is supported by:
– The rising 100-bar moving average on the 4-hour chart
– A prior swing low tested earlier in the month
– Mild Fibonacci retracement support (38.2% of the move from March 2024 lows to April peaks)
The inability of sellers to close below these levels signaled exhaustion in bearish momentum.
### Resistance Levels
– **Initial Resistance: 1.3675–1.3685**
– The area includes the 100-hour moving average and short-term highs.
– Considered an intraday decision point for market participants.
– **Stronger Resistance Zone: 1.3720–1.3745**
– This zone has consistently triggered selling interest in recent sessions.
– Includes the 200-hour moving average, a psychologically important handle.
– **Upside Target If Bulls Break Out:** 1.3800–1.3835
– The upper boundary of a channel observed on daily charts.
– Near-term Fibonacci extension levels suggest this could be the next challenge.
### Converging Technical Indicators
– The Relative Strength Index (RSI) on the 4-hour chart has rebounded from oversold territory and is trending higher.
– MACD (Moving Average Convergence Divergence) histogram has crossed above the zero line, indicating bullish crossover momentum.
– Price is now trading above both the 100- and 200-hour moving averages, often seen as a bullish short-term sign.
## Market Sentiment and Traders’ Positioning
Institutional positioning data from the Commodity Futures Trading Commission (CFTC) for the week of April 9–15, 2024, shows:
– Net short positions on USD/CAD have been gradually unwinding since mid-March.
– Canadian dollar longs have declined marginally, suggesting that confidence in CAD upside is softening
Read more on USD/CAD trading.