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

The USD/CAD pair enters the January 25th session following a pronounced move to the lowside, with the latest daily bar closing at 1.3697 after a 0.65% decline. Investors are now monitoring whether this bearish impulse is a structural shift or a temporary mean reversion as price action approaches the 1.3680 figure magnet.

Understanding the Daily Bar Message

The latest price action saw USD/CAD oscillate between a high of 1.3800 and a low of 1.3695. Closing almost exactly at the session low suggests that bearish momentum remains intact heading into the Sunday open. In level-driven regimes, the highest-quality information is found in location; the market is currently testing the resolve of buyers near the 1.3700 psychological support.

Session Handover Map

As liquidity returns to the market, three distinct windows will define the intraday trend:

• 06:05 London: The Asia close into the London open typically provides the first range-definition impulse and a test of the prior bar's extremes.
• 10:20 London: Price discovery clarifies whether the pair will rotate back toward the pivot or extend the current downside move.
• 11:25 New York: The arrival of North American liquidity acts as the ultimate validator for breakouts or failures back into the established range.

Key Technical Levels

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

Probability-Weighted Scenarios

Base Case (60%): Rotation Around Pivot

The most likely outcome involves a period of consolidation around the 1.3730 pivot. Traders should favor fading extremes and monitoring retests rather than chasing momentum. If price persists near the 1.3680 magnet, a mean reversion toward the pivot is a high-probability technical setup.

Upside Extension (20%): Resistance Break

Acceptance above the 1.3800 handle would shift the bias back to the bulls, targeting 1.3830 and 1.3870. This scenario is invalidated if the price fails to hold above the 1.3730 pivot following a brief rally.

Downside Reversal (20%): Support Collapse

A sustained break below 1.3700 opens the door for a move toward 1.3660. For this move to be considered structural, we need to see New York liquidity confirm the break set during the London session.

Execution Strategy and Macro Context

When trading high-beta FX like the Loonie, the 1.3730 pivot acted as a regime filter. If the pair is sitting near a figure, assume the market will probe both sides at least once. This is why the pivot/figure combination behaves like a magnet before direction clarifies.

For more detailed analysis on related currency pairs, explore our USD/CAD Strategy: Trading the 1.3730 Pivot or our Canada Inflation Analysis.

Related Reading

• USD/CAD Strategy: Trading the 1.3730 Pivot Amid Growth FX Impulse
• Canada Inflation Hits 2.4%: Core Easing Supports Case for BoC Hold
• Canada Retail Sales Rise 1.3%: Resilience Firms Growth Narrative