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Canadian Dollar Short-term Outlook: USD/CAD From Plunge to Pivot- Reversal at Risk Rises

By :   Michael Boutros , Sr. Technical Strategist
February 3, 2026 9:09 PM

Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels

  • USD/CAD rebounded sharply from last month’s low, interrupting the decline but not yet repairing broader technical damage.
  • The recovery has stalled into downtrend resistance, with the weekly opening range now framing a key decision zone for near-term direction.
  • US ADP & Canada employment data on tap into the close of the week
  • Resistance 1.3722/33 (key), 1.38, ~1.3829- Support 1.3617/18, 1.3566/71 (key), 1.3485

USD/CAD has rebounded sharply after plunging more than 3% from the January highs, stabilizing off last month’s low and prompting questions over whether a more durable pivot is taking shape. That recovery stalled into downtrend resistance yesterday and the focus is on inflection off this zone. With the weekly opening range taking shape just below this barrier, focus shifts to whether price can break higher and confirm a more significant low, or if the rebound ultimately gives way to renewed downside pressure. The response here is likely to determine whether the recent bounce marks a turning point or simply a pause within the larger decline. Battle lines drawn on the USD/CAD short-term technical charts.

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 Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView

Technical Outlook: In last month’s Canadian Dollar Short-term Outlook, we noted that USD/CAD had, “rebounded off support today on the heels of President Trumps speech at Davos and the immediate focus is on this near-term recovery. From a trading standpoint, rallies would need to be limited to 1.3874 IF price is heading lower on this stretch with a close below 1.3785 needed to fuel the next leg of the decline.” USD/CAD broke support two-days later with price plunging more than 3.2% off the January high before rebounding at the 2024 September low-day close (LDC) at 0.3485.

The recovery extended more than 1.6% off the lows with price exhausting yesterday at the 75% parallel of the November downtrend. Was a more significant low registered last month or is this just a near-term pullback before the start of a larger advance? The immediate focus is on a breakout of the weekly opening-range for guidance heading into key Canada employment data on Friday.

Canadian Dollar Price Chart – USD/CAD 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView

Notes: A closer look at Canadian Dollar price action shows USD/CAD attempting to snap a two-day winning streak today after exhausting into the median-line. Initial support rests with the objective weekly open and the 38.2% retracement of the recent advance at 1.3617/18 and is backed by 1.3566/71- a region defined by the 61.8% retracement and the 2025 low-day close. Note that basic channel support converges on this threshold over the next few days and losses below this level would invalidate the near-term uptrend and shift the focus back towards 1.3485 and the March 2024 low / 100% extension of the November decline at 1.3420/31. Look for a larger reaction there IF reached.

Initial resistance is eyed at 1.3722/33- a region defined by the September & August low, the 2026 yearly open, and the 38.2% retracement of the November decline. A breach / daily close above this level would suggest a more significant low is in place and a larger recovery is underway. Subsequent resistance objectives are eyed at the 1.38-handle and the 52-week moving average, currently near 1.3829.

 

Bottom line: The USD/CAD rebound faltered at downtrend resistance yesterday with the weekly opening-range taking shape just below. From a trading standpoint, losses would need to be limited to 1.3566 IF price is heading higher on this stretch with a close above 1.3733 needed to fuel the next major leg of the advance.

Keep in mind we get the release of the US ADP employment report tomorrow with Canada jobs data on tap Friday. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Canadian Dollar Weekly Forecast for a closer look at the longer-term USD/CAD technical trade levels.

Key USD/CAD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

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