USDCAD has broken below a long-term ascending trend line that had been supporting the pair since mid-2024, signaling that a reversal from the extended uptrend could be underway.

The pair is currently trading around 1.3812 after the breakdown, and a pullback to retest the broken support-turned-resistance could provide an opportunity for sellers to rejoin the downtrend. The Fibonacci retracement tool shows potential areas where sellers might be waiting to defend the newfound bearish momentum.

The 38.2% Fib level at 1.38279 is located just above current price action and coincides with the broken long-term trend line, making it a critical resistance zone to watch. The 50% retracement at 1.38862 aligns with a previous consolidation area and the 200 SMA dynamic inflection point, while a larger correction could reach the 61.8% Fib at 1.39445, which could be the line in the sand for a bearish pullback.

If any of these Fibonacci levels hold as a ceiling during a retest, USDCAD could resume the slide to the swing low around 1.36391 or lower. On the other hand, a break back above the trend line and sustained gains above the highest Fib would invalidate the reversal scenario.

The 100 SMA (blue line) is crossing below the 200 SMA (red line) to confirm that the path of least resistance is now to the downside or that the decline is more likely to gain traction than to reverse. The narrowing gap between the moving averages points to weakening bullish momentum, and both indicators could serve as dynamic resistance on rallies.

Stochastic is climbing from oversold territory, which is typical after a sharp breakdown move. The oscillator has room to advance toward the overbought region, suggesting a corrective bounce could be underway before sellers return.

RSI is hovering near the 50 mark after bouncing from oversold conditions, indicating that momentum remains neutral to slightly bearish. The oscillator turning lower from current levels would reinforce the case for another leg down.