USDCAD tests 100-day moving average after rallying to last week's high

The USDCAD pair has moved higher, supported by a strengthening US dollar and a notable increase in US Treasury yields. This followed hawkish remarks from Fed Chair Warsh. The two-year US yield climbed 11.5 basis points to 4.347%, indicating diminished expectations for near-term monetary easing from the Fed, which underpinned the dollar's advance.

On the technical side, the intraday low found support between the rising 200-hour moving average at 1.38370 and the 100-hour moving average at 1.38599. That support cluster encouraged buyers to push the price upward, eventually breaking above the previous weekly high at 1.38970, aided by Warsh's speech.

The currency pair continues to make new session highs and is now testing the August 18–19 high at 1.39079. Directly above that level sits the more consequential 100-day moving average at 1.39140.

This moving average serves as a critical gauge for both bulls and bears. Breaking above and sustaining a position above the 100-day moving average would reinforce the bullish outlook and allow for further upside. The next targets would be near the 50% retracement at 1.39268, then the swing region between 1.39480 and 1.39663.

On the other hand, if sellers defend the 100-day moving average, the weekly high at 1.38970 would act as initial support. A drop back below that level would reduce bullish momentum and turn attention to the 100-hour moving average at 1.38599 and the 200-hour moving average at 1.38370.

For the moment, buyers are taking their shot. The 100-day moving average at 1.39140 is the next—and most significant—hurdle.