Canadian Dollar Technical Forecast: USD/CAD Breakout Unfolds
USD/CAD surged to fresh yearly highs - bulls vulnerable into major resistance. Battle lines drawn on the weekly technical chart.
Share this:
Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels
- USD/CAD breakout underway- bulls attempt four-week rally to fresh multi-year highs
- USD/CAD now approaching initial resistance objectives- FOMC, Core PCE on tap
- Resistance 1.4189-1.42 (key), 1.4357, 1.4538– Support 1.3984/90, 1.3881/99 (key), 1.3773
The US Dollar is poised to mark a fourth consecutive weekly advance against the Canadian Dollar with a breakout in USD/CAD surging to fresh multi-year highs. All eyes now fall on the Fed with the December interest rate decision on tap later today. Battle lines drawn on the USD/CAD weekly technical chart.
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 rally had extended into resistance and that, “From a trading standpoint, pullbacks would need to be limited to 1.3881 IF price is heading higher on this stretch with a close above 1.42 needed to fuel the next leg of the advance.” USD/CAD held resistance for two-weeks before breaking higher with price rallying more than 2.3% since the start of the month.
A slight adjustment to our slope keeps USD/CAD within the confines of the ascending pitchfork we’ve been tracking off the September lows. Initial weekly resistance is eyed at the 2020 high-week close at 1.4357 and is backed by more significant confluent zones at the 1.618% extension of the 2023 advance at 1.4482 and the 2016 close high at 1.4538. Note that the upper parallel converges on these levels into the close of the year and both levels represents areas of interest for possible topside exhaustion / price inflection IF reached.
Initial weekly support rests back at 1.4189-1.42 with medium-term bullish invalidation now raised to the highlighted median-line confluence around 1.4098-1.4115- a break / close below this threshold would suggest a more significant high was registered / threaten a larger correction within the yearly uptrend. Subsequent support objectives rests wit the 2020 March reversal close at 1.3990 and the 2022 high-week close (HWC) / 2023 high at 1.3881/99.
Bottom line: The USD/CAD breakout is approaching initial resistance objectives just higher with major event risk on tap into the close of the week. From a technical standpoint, the outlook remains constructive while above the median-line / 1.41. From at trading standpoint, 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.
Keep in mind the FOMC interest rate decision is on tap later today with key US inflation data slated for Friday. Stay nimble into the releases and watch the weekly close here 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
- British Pound (GBP/USD)
- Australian Dollar (AUD/USD)
- Swiss Franc (USD/CHF)
- US Dollar Index (DXY)
- Euro (EUR/USD)
- Gold (XAU/USD)
- Japanese Yen (USD/JPY)
- 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
USD/JPY outlook: Hawkish Fed recalibration pressures the yen
Stronger US growth momentum and rising Treasury yields are keeping USD/JPY pointed higher, even as Japanese policymakers try to limit the pressure building across domestic markets.
Gold, silver slammed as hawkish Fed repricing reignites dollar upside
Gold and silver had held up surprisingly well against surging US yields. Wednesday’s DXY breakout may have changed that equation.
Euro Short-term Outlook: EUR/USD Selloff Nears Critical Yearly Support 9 23 2026
Euro has fallen seven of the past nine sessions, with stretched momentum raising the stakes as EUR/USD closes in on a major inflection zone.
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.