Canadian Dollar Forecast: USD/CAD Breakout Looms as Trump Takes Office
USD/CAD is poised for a breakout with the January opening-range intact ahead of President Trump’s inauguration. Battle lines drawn on the USD/CAD weekly technical chart.
Share this:
Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels
- USD/CAD Six-week rally halts into uptrend resistance- risk for price inflection ahead
- USD/CAD January opening-range breakout imminent– Trump Inauguration, Canada CPI on tap
- Resistance 1.4483, 1.4538 (key), 1.4660/90– Support ~1.43, 1.4115/63 (key), 1.3975/90
The US Dollar is poised to mark a second weekly decline against the Canadian Dollar with USD/CAD holding a well-defined monthly range just below uptrend resistance. Battle lines drawn on the USD/CAD weekly technical charts ahead of the Presidential Inauguration & Canada CPI.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Loonie setup and more. Join live on Monday’s at 8:30am EST.
Canadian Dollar Price Chart – USD/CAD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView
Technical Outlook: In last month’s Canadian Dollar Technical Forecast we noted that the USD/CAD breakout was approaching initial resistance objectives and that, “losses should be limited to this week’s low IF price is heading higher on this stretch with a close above 1.4358 needed to keep the focus on a stretch towards the upper parallel / 1.4480- look for a larger reaction there IF reached.”
USD/CAD briefly registered an intraday / yearly high at 1.4467 the following day before exhausting- price has been in consolidation below this high for the past four-weeks with the 75% parallel offering support since the start of the year. The January opening-range remains intact and is defined by the first three-days of 2025 trade- we are on breakout watch with the broader long-bias vulnerable wile below the upper parallel.
Slope support currently rests near then 1.43-handle and is backed by the 2016 high-week close (HWC) / 23.6% retracement of the late 2023 rally at 1.4115/63- note that this threshold converges on the median-line over the next few weeks. Losses below this threshold would suggest a more significant high was registered last month / a larger correction is underway within the 2024 uptrend. Subsequent support seen at 1.3975/90 with broader bullish invalidation set to the 2022 HWC / 2023 swing high at 1.3881/99.
Resistance remains unchanged at the 1.618% extension of the 2023 advance at 1.4483 and is backed closely by the 2016 close high at 1.4538. A topside breach / close above the upper parallel would threaten another bout of accelerate gains for the greenback with the next major technical consideration eyed at 1.4660/90- a region defined by the 78.6% retracement of the 2021 decline, the 1.618% extension of the December 2023 advance, and the 2016 / 2020 swing highs. Look for a larger reaction there IF reached.
Bottom line: The USD/CAD January opening-range is set just below confluent uptrend resistance- look for the breakout in the days ahead for guidance. From a trading standpoint, losses should be limited to the median-line / 1.4115 for the December rally to remain viable with breach above 1.4538 needed to fuel the next major leg of the advance.
Keep in mind we are heading into an extended holiday weekend with the inauguration of President Trump and Canadian CPI on tap early in the week. A flurry of executive actions is expected- stay nimble here until we get the monthly range breakout and watch the weekly close for guidance. Review my latest Canadian Dollar Short-term Outlook for a closer look at the near-term USD/CAD technical trade levels.
US / Canada Economic Data Release
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts
- Japanese Yen (USD/JPY)
- British Pound (GBP/USD)
- Gold (XAU/USD)
- US Dollar Index (DXY)
- Australian Dollar (AUD/USD)
- Swiss Franc (USD/CHF)
- Euro (EUR/USD)
- Crude Oil (WTI)
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Dow Jones Slide Shows What Rate Hike Bets Mean for Stocks
The Dow Jones support breakdown shows rising bond yields and rate hike bets hitting U.S. stocks while tech giants prop up the Nasdaq.
EUR/USD forecast remains tilted lower with French bond troubles ahead of US jobs report
The EUR/USD has tagged a fresh year-to-date low as French public-finance concerns trigger a government bond sell-off. Today's US jobs report may change little, with resilient activity, elevated energy prices and hawkish Fed bets keeping the greenback supported. With the pair trapped below resistance at 1.1410, the risk to the near-term EUR/USD forecast is tilted to the downside.
What Stretched 10-Year Yields Mean for Major Currency Pairs in Q4
U.S. 10-year Treasury yields are nearing a long-term resistance zone with overbought RSI readings, raising near-term pullback risk for the dollar.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.