Title: USD/CAD Hits New High, Eyes Further Gains Above Key Technical Levels
Original Author: Greg Michalowski
Adapted and Expanded by [Your Name]
The USD/CAD currency pair has caught the attention of forex traders as it pushes higher, recently achieving a new 2025 high. Driven by a combination of technical and macroeconomic factors, the pair has broken through significant retracement levels, signaling potential for continued bullish momentum. Most notably, USD/CAD has climbed above the 38.2% Fibonacci retracement of the 2025 trading range — a key technical milestone that suggests the correction from recent lows may be turning into a broader uptrend.
This article analyzes the current state of USD/CAD from both a technical and fundamental perspective, outlines important levels to watch, and discusses what could influence the pair in the short to medium term.
Technical Overview
As reported by Greg Michalowski of InvestingLive.com, USD/CAD surged to a new 2025 high earlier today before retreating slightly. However, the pair quickly regained upward momentum and is now trading back above the 38.2% Fibonacci retracement level of its 2025 range. This level stands as a critical barrier in determining whether the correction seen earlier in the year is truly reversing.
Key technical developments include:
– The 38.2% retracement of the 2025 trading range sits at approximately 1.3708 (subject to slight variation depending on the specific high and low levels used).
– Price action broke above this key retracement earlier and appears to be stabilizing above it, which could signal further bullish strength.
– Resistance now aligns near the 1.3745–1.3760 zone, with support strengthening in the 1.3680–1.3700 range. A sustained break above resistance may trigger a move toward 1.3800.
– On the downside, failure to hold above the retracement level could lead to a retest of the swing low near 1.3645.
The 38.2% Fibonacci retracement level is often seen as a minimum rebound level in corrective phases. When prices consistently stay above this level after a significant decline, many traders interpret it as a sign of a potential bullish continuation.
Using a standard Fibonacci retracement tool on the 2025 high-to-low range, the key Fibonacci levels to note are:
– 23.6% Retracement: ~1.3650
– 38.2% Retracement: ~1.3708 (currently being tested and reclaimed)
– 50% Retracement: ~1.3755
– 61.8% Retracement: ~1.3802
A break above the 50% and eventually the 61.8% levels would strongly confirm the emergence of a new bullish trend.
Momentum and Trend Indicators
To further analyze the technical picture, a look at common momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) adds more context:
– The RSI on the 4-hour chart is currently trading near 60, which is neutral to slightly bullish. This suggests that while the pair is not yet overbought, there is room for further upside.
– MACD has recently crossed above its signal line and is trending higher, confirming upward momentum.
– Prices are also holding above the 100- and 200-period exponential moving averages (EMAs) on key intraday timeframes, a bullish signal in both short- and medium-term analysis.
Fundamental Drivers
Beyond technicals, several macroeconomic factors are influencing USD/CAD’s recent strength. The divergence between the U.S. Federal Reserve and the Bank of Canada regarding their interest rate policies is one of the key themes playing out in 2025.
1. Fed’s Hawkish Stance
– The Federal Reserve has remained more hawkish than expected in
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