Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels
- USD/CAD rally extends 3.3% off yearly low- rips into critical resistance near four-month high
- USD/CAD risk for possible inflection / exhaustion- October opening range in focus amid U.S. government shutdown
- Resistance 1.3978/1.4019(key), 1.4184, 1.4292-1.4315– Support 1.3881, 1.3819 (key), 1.3733
The Canadian Dollar is testing a critical pivot zone with USD/CAD surging into major technical resistance today. The June rally hangs in the balance, with a breach above this zone needed to fuel the next leg higher. Failure to clear this barrier would leave the pair vulnerable to a near-term reversal, making this a make-or-break moment for the broader trend. Battle lines 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 last month’s Canadian Dollar Technical Forecast we noted that USD/CAD was carving the September opening-range just below resistance and that from a trading standpoint, “losses should be limited to the yearly low-week close IF price is heading higher on this stretch with a close above 1.3835 needed to validate a breakout of the yearly downtrend.” USD/CAD tested / defended the 2025 low-week close at 1.3733 two-weeks later before reversing sharply higher with the advance now extending nearly 1.9% off the September low.
The advance is testing major resistance this week at 1.3978-1.4019- a region defined by the 2022 swing high, 200-day moving average, the 52-week moving average, the May high, and the 38.2% retracement of the yearly range. Note that the 2022 trendline converges on this threshold over the next few weeks and further highlights the technical significance of this key pivot zone. A topside breach / close above this region is needed to invalidate the May breakdown / mark resumption of the June advance. Subsequent resistance objectives eyed at the February close low at 1.4184 and the 2025 high-week close (HWC) / 61.8% retracement at 1.4292-1.4315 – look for a larger reaction there IF reached.
Initial weekly support rests with the 2022 HWC at 1.3881 and is backed by medium-term bullish invalidation at the April low close / July trendline at 1.3819- a break / close below this slope would be needed to suggest a more significant high is in place / a larger reversal is underway. Subsequent support seen at the 1.3733 and the yearly close low at 1.3583.
Bottom line: USD/CAD is testing a critical resistance zone into the start of the month, and the focus is on possible inflection off this zone with the long-bias vulnerable while below. Look for a breakout of the October opening-range for guidance here. From a trading standpoint, losses would need to be limited to 1.3819 IF price is heading for a breakout on this stretch with a weekly close above 1.4019 needed to fuel the next major leg of the advance.
Keep in mind that the September Non-Farm Payroll figures will be delayed amid the ongoing government shutdown and traders will be closely monitoring the flow of headlines out of Washington D.C. to offer a catalyst in the days ahead. Stay nimble into the monthly opening-range and watch the weekly closes here for guidance. 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
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