USD/CAD Strategy: Trading the 1.3730 Pivot Amid Growth FX Impulse

The USD/CAD pair enters the January 24 liquidity window following a decisive bearish impulse, closing the previous session at the low end of its 1.3695–1.3800 range. As high-beta FX assets react to shifting equity volatility, the 1.3730 pivot stands as the primary technical filter for the upcoming global session handover.

Market Interpretation: The Bearish Close

Following a -0.65% decline in the last liquid session, the market has sent a clear message by ignoring the 1.3800 upper extreme and settling near the session lows. In the current level-driven regime, this positioning suggests that the immediate path of least resistance is testing the lower support ladder unless a reclaim of the structural pivot occurs during the London open.

Liquidity Window Handover Map

• 06:05 London: The Asia close and London open will define the initial range. Traders should watch for the first test of the 1.3695 low.
• 10:20 London: Price discovery usually clarifies the mid-morning bias. Watch for rotation toward the 1.3730 pivot.
• 11:25 New York: The NY open provides the liquidity step-up. This is the critical juncture where breakouts below 1.3700 will either validate or fail.

Key Technical Levels for January 24

Strategic execution depends on the market's relationship with the following decision points:

• Resistance Ladder: 1.3800, 1.3830, 1.3870
• Daily Pivot (Regime Switch): 1.3730
• Support Ladder: 1.3700, 1.3660, 1.3630
• Figure Magnet: 1.3680

Probability-Weighted Scenarios

Base Case: Rotation Around 1.3730 (60% Probability)

The most likely outcome is a mean-reversion move toward the 1.3730 pivot. In this scenario, trading the band is preferred, favoring fades at the extremes rather than chasing breakouts. High-beta FX often overshoots before reverting to structural anchors.

Downside Reversal (20% Probability)

A clean break and acceptance below 1.3700 during the New York session would open the door for a move toward 1.3660 and 1.3630. This scenario is invalidated if the price reclaims the pivot quickly.

Upside Extension (20% Probability)

Resistance acceptance above 1.3800 is required to shift the bias back to bullish, targeting 1.3830. This would suggest the recent growth impulse was a temporary correction in a broader uptrend.

Execution and Risk Management

In markets respecting boundaries, the quality of information is found in liquidity presence rather than narrative. Traders should treat the first break of a level as a signal and the subsequent retest as the actual trade entry. If a break fails quickly, consider fading the move back to the pivot with reduced size.

Risk sizing should be calibrated to realized volatility. If the daily range continues to expand, reduce leverage and widen stops to accommodate higher noise. Conversely, in a compressing range, tighten stops but avoid overtrading within the 1.3680 figure magnet.

Related Reading

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• Bank of Canada Outlook: Extended Hold Expected Through 2026