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The USDCAD pair experienced a failed breakout attempt this week amid strong USD momentum, despite rising oil prices that usually support the Canadian dollar. The rally stalled at the 61.8% retracement level (1.3757) and subsequently fell below key swing zones and the 100/200-hour moving averages. Technical indicators now favor sellers as long as the price remains below critical support at 1.3679, with a potential test of the 1.3623-1.3630 support zone if the 1.3651 level breaks. Conversely, a rebound above the 200-hour MA could shift bias back to buyers, targeting the 1.3704 midpoint and the 1.3724 swing area. Traders are closely watching these levels for confirmation of the next directional move. For forex traders, the USDCAD's technical setup highlights the USD's dominance in the current market environment. The pair's sensitivity to oil prices adds complexity, as Gulf investors often hedge against currency fluctuations tied to energy markets. A breakdown below 1.3651 could trigger a sharper decline, while a sustained recovery above 1.3679 might attract buyers. The lack of clear momentum underscores the need for caution in both long and short positions. The immediate focus remains on the 1.3651-1.3679 range, with potential spillover effects on other USD pairs. Gulf investors should monitor oil price movements and USD index trends, as these factors could amplify volatility. Key watchpoints include the 1.3623 support and 1.3724 resistance, with a definitive break in either direction likely to shape the pair's trajectory for the coming weeks.
