USDCAD pressured to key support on trade optimism

The USDCAD extended its decline today, pushing to new session lows and retesting the key support level at 1.3617—the low from last week. The downside momentum gathered pace after the pair failed to hold above the 100- and 200-hour moving averages earlier in the day, where sellers reasserted control and capped upside attempts.

The move comes as fresh optimism surrounds the prospect of a renewed U.S.–Canada trade deal following Canada’s decision to withdraw its proposed Digital Services Tax. The removal of this tax—previously a key source of tension—has opened the door for resumed trade discussions, helping boost sentiment around the Canadian dollar and applying downward pressure to USDCAD.

Technically, the 1.3617 level is providing initial support. A break below this area would increase bearish momentum, exposing the next downside targets at 1.3591 and then the 2025 low at 1.3539 (also the lowest level since October 2024). On the topside, immediate resistance comes in at 1.3651—the high of the broken swing area. Beyond that, the 50% midpoint of the June range at 1.3668 will be eyed.

Key support levels:

1.3617 – Last week’s low (first support)

1.3591 – Minor swing level

1.3539 – 2025 low and lowest level since October 2024

Key resistance levels:

1.3651 – Swing area high

1.3668 – 50% retracement of June range

1.3686 – 100-hour moving average

1.3703 – 200 hour moving average

The bias remains tilted to the downside while below resistance. A break of 1.3617 would shift the focus toward the yearly low. Reclaiming 1.3668 would ease some of the immediate bearish pressure.