USD/CAD saw significant volatility earlier this week, initially dipping lower on Monday following the Trump tariffs story and its subsequent rejection. On Tuesday, the pair returned lower once again, before bouncing higher to close stronger for the day.

During this back-and-forth movement, price briefly moved outside the previously limited trading range (red box on the chart below) defined by the lower swing area between 1.4334 and 1.4348 and the upper swing area between 1.44487 and 1.4466. However, by the close of trading yesterday, the price was back in the red box.

In today’s trading, a corrective move lower during the Asia-Pacific session pushed the price into the lower swing zone, where buyers stepped in and pushed the price back up.

This bounce extended above the 100- and 200-hour moving averages, which are positioned between 1.43748 and 1.4382. Since breaking above these levels, the price has held steady above the moving averages, shifting the short/intermediate bias in favor of the buyers.

If this bullish momentum continues (with current price near 1.4396), a move towards the upper “Red Box” swing zone is expected, between 1.44487 and 1.4466.

Conversely, if the price breaks below the 100- and 200-hour moving averages, this would tilt the bias back in favor of the sellers, with traders likely to target the lower swing area between 1.4334 and 1.4348.