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The USD/CAD pair remained in consolidation near 1.4247 last week, maintaining a neutral outlook for the initial part of this week. Technical analysis suggests a deeper pullback is possible, though downside risks are limited above the 1.3965 level, which acts as dynamic support after previously functioning as resistance. A sustained move above 1.4247 could reignite the upward trend from 1.3480, targeting the 61.8% Fibonacci retracement at 1.4290. A firm break above this level would signal stronger bullish momentum.
For traders, the key focus is on the 1.3965-1.4247 range, which serves as a critical technical pivot. A breakdown below 1.3965 could open the door for further declines, while a breakout above 1.4290 might attract new buyers. The pair's performance will also be influenced by broader USD demand and Canadian economic data releases this week.
Market participants should monitor the 1.4247 level closely, as a sustained close above it could shift the bias to bullish. Conversely, a retest of 1.3965 may test the resilience of the current consolidation. Traders are advised to use tight stop-loss orders given the tight range-bound action.
