USD/CAD reverses gains as dollar momentum fades mid-week

The US dollar's mid-week rally proved short-lived, with USD/CAD retreating from session highs as broad dollar strength evaporated. The greenback initially gained ground across major pairs but failed to sustain momentum, suggesting the recent pump was a false breakout. Market sentiment shifted as traders reassessed the dollar's near-term prospects amid mixed signals from equity markets. The S&P 500 and Nasdaq 100 showed resilience despite initial weakness, while the Dow Jones Industrial Average maintained steady performance. This equity stability reduced safe-haven demand for the dollar, allowing commodity currencies like the Canadian dollar to recover ground. Technical indicators suggest the dollar's failure to break above key resistance levels triggered profit-taking, with USD/CAD now testing support near recent lows. The false breakout pattern indicates potential further dollar weakness ahead, particularly if risk appetite improves and commodity prices remain supported.