USDCAD After the Fed Decision: A Breakout Battle for Control

The Canadian dollar, USDCAD, has witnessed significant upward movement following the Federal Open Market Committee (FOMC) decision. This breakage above key technical levels has shifted control to buyers, but the question now is whether they can sustain this breakout and overcome resistance near 1.4000. Prior to the FOMC announcement, the currency was oscillating between the medium-term moving average (200-SMA) at 1.3888 and the long-term moving average (100-DMA) at 1.3939. Post-FOMC, the pair moved above the 100-DMA, the 38.2% retracement level at 1.3931, and the swing area between 1.3948 and 1.3966. This latter area is now the first key support zone. A break above this range maintains buyer control. Buyers now need to get above and stay above the next resistance area between 1.3990 and 1.4003, with the 50% retracement of the decline from the June high also in that vicinity at 1.39915. The combination of this swing range, the 50% retracement level, and the natural 1.4000 level makes this a critical decision zone. If buyers can extend above 1.4003 and stay there, the next upside targets become: the 61.8% retracement at 1.4052 and the higher swing area between 1.4117 and 1.4149. On the other hand, sellers need to focus on pushing the price below the support range of 1.3948 to 1.3966. A break beneath that level would weaken bullish momentum and re-introduce previous support levels at the 38.2% retracement at 1.3931 and the 100-DMA at 1.3939, potentially opening the door toward the 200-SMA at 1.3888, which previously helped define the lower bound of the pre-FOMC range.