USD/CAD starts the new trading week attempting to recover after last week's sharp post-FOMC decline. Price has once again found support around the 50% Fibonacci retracement, where buyers are trying to regain control.
From a technical perspective, the broader trend remains bearish after the rejection from the 23.6% retracement. However, the latest candles show that downside momentum is slowing, with price establishing a higher low and attempting to push back toward the 38.2% Fibonacci level.
The stochastic oscillator has crossed higher, signalling improving short-term momentum. That said, momentum alone is not enough. Buyers still need a convincing close above the 38.2% retracement to confirm that a deeper recovery is underway.

Fundamental Drivers
Markets are beginning August after a volatile end to July:
The Federal Reserve left interest rates unchanged.
US Core PCE inflation came in slightly below expectations, reinforcing the gradual disinflation trend.
Treasury yields remain elevated, supporting the US dollar.
Geopolitical tensions in the Middle East continue to support safe-haven demand while keeping oil prices elevated.
Higher oil prices offer some support to the Canadian dollar, creating opposing forces within USD/CAD.
This tug-of-war explains the pair's current consolidation around key technical levels.

Key Levels
Resistance
1.4068 (38.2% Fibonacci)
1.4120–1.4140 (23.6% zone)
Support
1.4015 (50% Fibonacci)
1.4000 psychological support

Trading Outlook
As long as price holds above the 50% retracement, buyers still have an opportunity to challenge higher resistance levels. A rejection below current levels, however, would shift attention back toward last week's lows.

Remember: Patience around key support and resistance often produces higher-probability trades than chasing price.