USDCAD selloff comes into play upon breaking 1.3700

As of March 23, 2026, USDCAD is clawing its way higher in a corrective uptrend after bottoming out at 1.3699. Both technical and wave analysis paint a picture of a tug-of-war: bulls are aggressively pushing to secure gains and consolidate above the iconic psychological milestone of 1.3700, transforming it from a ceiling into a potential new floor.

The spark behind the pair's rally is the Dollar Index (DXY), which climbed to 99.74—a reminder that the greenback still has some fight left. But here is the twist: the DXY is now facing a stubborn resistance zone between 100.15 and 100.30, a battleground that has sent it packing more than once before.

Looking at this week's wave setup (March 20–27), a local correction appears to be unfolding within a larger uptrend. If the pair fails to stay above 1.3725, a reversal wave could gain traction, targeting a dip back to 1.3625. Conversely, a clean bounce from 1.3700 would be the starting gun for a fresh impulse toward 1.38 and beyond. 

Fundamentally, the Bank of Canada (BoC) stepped into the spotlight on March 18, keeping interest rates steady at 2.25% and effectively closing the book on its aggressive easing cycle. Such a move gives the loonie some much-needed stability—and puts a lid on how far USDCAD can stretch.

Oil adds an extra layer of drama. Sky-high volatility in energy markets, fueled by the raging Middle East conflict, continues to prop up the Canadian dollar as a major exporter. With Brent hovering near its highs, elevated crude prices act like a heavy anchor, preventing the pair from breaking out of its current channel. 

The ultimate recommendation is to sell USDCAD upon breaching 1.3700. Place Take Profit at 1.3665. Set Stop Loss at 1.3730.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.