USDCAD Analysis: Loonie Nears 16-Month High; Domestic & External Factors Align

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDCAD for February 10, 2026.

Technical Analysis of USDCAD

USDCAD Daily Chart Insight

• The chart is experiencing a downward trend but has reached a significant support level that could trigger a reversal. From a risk/reward perspective, conditions currently favor a short-term upward move (Long position) targeting 1.3650, though the overall trend will remain bearish until prices successfully break above and hold the 1.3700+ zone.
• Key Levels: On the support side, the critical floor sits at 1.3500-1.3505, marked by a recent sharp rejection wick that bottomed at 1.3504 and reinforced by its role as a major bottom in June 2025, making it the immediate “line in the sand.” If this psychological level fails, the next structural support target would be 1.3400. For resistance, the nearest ceiling lies at 1.3650-1.3680, a former consolidation zone that often attracts retests after breakdowns. Above that, 1.3780-1.3800 forms a heavy resistance cluster containing the Black moving average and previous swing lows, while 1.3850 aligns with the Green long-term moving average—a level that must be reclaimed to shift the broader trend back to bullish.

USDCAD 2-Hour Chart Analysis

• The chart displays a textbook “Trend Rejection” pattern, indicating the correction phase has concluded and the downtrend has reasserted itself. Despite the current downward momentum, traders should remain alert to the 1.3500 support level, particularly as oversold conditions are present—a combination that frequently produces a temporary bounce or period of consolidation before the prevailing trend resumes its course.
• Breakout Scenarios: Two scenarios are possible from here: In Scenario A (Bullish Bounce), price approaches the 1.3500 support zone where sellers may take profits given the oversold Stochastics, and traders should watch for reversal candle confirmation—such as a Hammer or Doji—on the H2 timeframe around 1.3500-1.3510, which could lead to a bounce back toward 1.3600 to relieve oversold conditions. In Scenario B (Bearish Continuation), the rejection at the Green moving average suggests the market is positioning for a “Lower Low,” with a clean H2 candle close below 1.3490/1.3500 serving as the breakdown trigger that would confirm an accelerating downtrend and likely spark stop-loss orders beneath 1.3500, potentially causing a rapid flush toward 1.3400.

USDCAD Pivot Indicator

• The M30 chart confirms the bearish bias seen on the higher timeframes. The market is currently in a “pause” phase (Bear Flag) at 1.3550. Unless buyers can force a close above 1.3580 quickly, the path of least resistance remains down, with a break of 1.3550 likely leading to fresh lows.
• The Bearish Continuation: This scenario involves a “Bear Flag” breakdown pattern, with the key trigger being a 30-minute candle close below 1.3550. Given the magnitude of the initial drop—approximately 100 pips—a measured move lower would project a target around 1.3500. Notably, the fast-moving average (Purple line) is functioning as a descending trendline, continuously pressuring price downward toward the support floor.
• Mean Reversion Bounce: This scenario is based on price being significantly extended from the longer-term moving averages (Green and Black lines), creating a “gap” that markets sometimes need to fill through mean reversion. The trigger for this bounce would require price to reclaim and close above both the Purple moving average and the 1.3580 level. If triggered, a corrective rally could target the Black moving average at 1.3610, though this would represent a technical reset of indicators rather than a change in the underlying downtrend.

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