USD/CAD Technical Outlook: Futures Traders move Against the Canadian Dollar

USD/CAD has rebounded from key technical support back in July, and momentum is turning higher once again. While the move appears corrective, scope remains for further upside towards the 1.39 handle (or even 140) before the larger trend kicks back in. For now, futures traders are moving against the Canadian dollar, which further support a bullish case for USD/CAD over the near term.

View related analysis:

USD/CAD Technical Analysis: US Dollar vs Canadian Dollar

The Canadian dollar spent much of February through June in a steep decline against the US dollar, with USD/CAD falling 8.5% after President Trump paused tariffs for Canada, Mexico, and China. Support emerged around 1.36, aligning with a multi-month high-volume node (HVN) and the 200-week EMA.

While the current rebound appears corrective — suggesting USD/CAD may eventually resume its move below 1.36 — there is scope for bulls to push higher before any reversal develops.

Whether USD/CAD can test the 1.40 handle, near the 2022 high at 1.3977, will depend on how resistant the Federal Reserve remains to the Trump administration’s calls for deeper interest rate cuts. Policy expectations from the Bank of Canada (BoC) also play a role, with next week’s Canadian inflation data a key driver to watch. For now, the daily chart points to at least one more leg higher, while market positioning data indicates that traders are rebuilding short exposure to the Canadian dollar.

Chart analysis by Matt Simpson - data source: TradingView USD/CAD

CAD/USD Positioning: Canadian Dollar Futures – Weekly COT Report

Asset managers have held a net-short position in the Canadian dollar since early 2024, while large speculators have been net-short since mid-2023. The recent trend is key — net-short exposure for both groups has been rising in recent weeks as the Canadian dollar weakens, strengthening the case for USD/CAD bulls.

Furthermore, asset managers (real money accounts) have been reducing gross longs while adding to shorts, reinforcing the bullish technical setup highlighted on the daily chart.

Chart analysis by Matt Simpson - data source: TradingView USD/CAD

USD/CAD Technical Analysis: Daily Chart

The daily chart shows that on three occasions, bears attempted but failed to break USD/CAD below the HVN just under 1.36. Each attempt resulted in a solid bounce, with the third driving prices to a 10-week high. Prices have since retraced into a strong support zone, comprising the 50% retracement level, 50-day EMA, and monthly pivot point. Furthermore, Thursday formed a bullish engulfing candle and a higher low, using the monthly pivot as a launch point.

Bulls may look to buy dips within Thursday’s range and keep a bullish bias while prices remain above Thursday’s low (1.3745).
The 1.3879 high near the 200-day EMA presents a potential near-term upside target.
A break above 1.39 would bring the monthly R1 pivot, 2022 high, and the 1.40 handle into focus.

Chart analysis by Matt Simpson - data source: TradingView USD/CAD

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.