USDCAD Faces Key Technical Support as Market Awaits FOMC Decision

The USDCAD has slipped to a new session low at 1.4079, putting the focus on its 200-hour moving average at 1.40792. This level has been a significant technical pivot in recent trading sessions, with buyers previously stepping in to support the pair. A break below this moving average would increase the bearish bias.

In the past week, traders have supported the price above the 200-hour moving average. Last Friday, buyers stepped in after the pair tested this level, and the decline stalled just above it on Monday. The market has found support in this area again yesterday and today.

As long as the price remains above the 200-hour moving average, buyers have a chance to regain control. Their first hurdle is the 100-hour moving average at 1.40958. A move back above this level would shift the near-term bias towards the upside, targeting the former support zone between 1.41297 and 1.41488, which has turned into resistance.

Conversely, a sustained break below the 200-hour moving average would hand control back to sellers, with the first target being last week's swing low at 1.4055. A move below that level would increase bearish momentum, opening the door towards Monday's low near 1.4003, just above the key psychological level of 1.4000. If sellers extend below 1.4000, attention would turn to the 38.2% retracement of the rally from the May 1, 2026 low, which is at 1.39812.

The FOMC rate decision is scheduled for later today at 2 PM, with expectations that the Fed will keep rates unchanged, although there is a 35% chance of a tightening priced in by the market. Despite the decline in USDCAD, yields are higher, with the two-year up 3.0 basis points at 4.307% and the 10-year up 2.4 basis points at 4.628%. Stocks are under pressure, with the NASDAQ down 1% and the S&P down 0.7%.