Canadian Dollar Forecast: USD/CAD Breaks Out - Bulls in Charge
USD/CAD rips through resistance, confirming a bullish breakout into the November open at six-month highs. Traders eye jobs data next. Battle lines drawn on the weekly chart.
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Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels
- USD/CAD rips through pivotal resistance- bulls in control as price extends to six-month highs
- Focus remains on a reaction into channel resistance, outlook constructive while above monthly open
- Resistance 1.4151, 1.4184 (key), 1.4292-1.4315– Support 1.3978/1.4019(key), 1.3881, 1.3734
The Canadian Dollar remains under pressure, with USD/CAD ripping through key resistance to confirm a bullish breakout into the monthly open. The move keeps the June uptrend intact, with channel resistance now coming into view ahead of key U.S. and Canadian employment reports. Battle lines are drawn on the USD/CAD weekly technical chart.
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Canadian Dollar Price Chart – USD/CAD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView
Technical Outlook: In my last Canadian Dollar Technical Forecast we noted that, “The USD/CAD rally has stalled at key resistance for the past four-weeks with the bulls relenting ahead of major event risk over the next 24 hours. From a trading standpoint, the near-term risk is tilted to the downside, but losses should be limited to 1.3874 IF price is heading higher on this stretch with a weekly close above 1.4019 needed to fuel the next leg of the advance.” Price plunged nearly 1.4% off the October highs to register an intraweek low at 1.3888 before rebounding sharply on the heels of the BoC and Fed rate decisions. The subsequent rally has now extended into a fourth consecutive day with the advance breaking above confluent resistance into the November open.
Initial weekly resistance is now in view at the February low at 1.4151, closely followed by the February close low at 1.4183. Note that channel resistance converges on these levels over the next few weeks and a breach / weekly close above would be needed to fuel the next leg of the advance. The next major technical consideration is eyed at 1.4292-1.4314- a region defined by the 2025 high-week close (HWC) and the 61.8% retracement of yearly range. Look for a larger reaction there IF reached.
Weekly support now rests at former resistance around 1.3978-1.4019. This confluence zone is defined by the 2022 swing high, the 52-week moving average and the 38.2% retracement. Note that the 2022 trendline converges on this region and further highlights the significance of this pivotal zone. USD/CAD needs to stabilize above this level for the June rally to remain viable with broader bullish invalidation now raised the 2022 HWC at 1.3881. A break / close below this threshold would be needed to suggest a more significant high is in place / a larger trend reversal is underway. Subsequent support seen at the 2025 low-week close (LWC) at 1.3734.
Bottom line: USD/CAD has broken above pivotal resistance and keeps the outlook weighted to the topside into the monthly open. From a trading standpoint, losses would need to be limited to 1.3978 IF price is heading higher on this stretch. Look to reduce portions of long-exposure / raise protective stops on a rally towards channel resistance with a close above 1.4183 ultimately needed to fuel the next major leg of this advance.
Keep in mind we get the release of the ADP jobs report tomorrow in the U.S. with the Canadian employment report on tap Friday. Stay nimble into the releases and watch the weekly close for guidance here. Review my latest Canadian Dollar Short-term Outlook for a closer look at the near-term USD/CAD technical trade levels.
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--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
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