Canadian Dollar Short-term Outlook: USD/CAD Breakout Imminent
USD/CAD plunged nearly 6.9% off the yearly highs with price now ranging just above trend support at the yearly low. Battlelines drawn on the short-term technical charts.
Share this:
Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels
- USD/CAD plunges nearly 6.9% off yearly high- rebounds off trend support at five-month lows
- USD/CAD weekly range-breakout pending- U.S. Core PCE / NFPs on tap
- Resistance 1.3881-1.39, 1.3978-1.4009 (key), 1.4176/78- Support 1.3795 (key), 1.3714, 1.3614
The US Dollar snapped a seven-week losing streak against the Canadian Dollar with USD/CAD rebounding off technical support at five-month lows. The focus now shifts to a breakout of the weekly range with the bears vulnerable into the close of the month. 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: USD/CAD plunged into downtrend support on Monday with prices holding a well-defined range into the close of the week. The immediate focus is on a breakout of this range with daily momentum divergence suggesting the yearly downtrend may be vulnerable while above slope support. Looking for possible price inflection off these lows.
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 trading into the lower parallel of the descending pitchfork extending off the yearly highs. The weekly opening-range remains intact, and the immediate focus is on a breakout here for near-term guidance.
Initial resistance is eyed at the 2022 high-close / 2023 high at 1.3881-1.39 and is backed by a more significant technical confluence near 1.3978-1.4009- a region defined by the 2022 high, the 2020 March weekly reversal close, and the 200-day moving average. Ultimately, a topside breach / close above the median-line would be needed to suggest a more significant low is in place / a larger reversal is underway.
Initial support rests with the 61.8% retracement of the late 2023 advance at 1.3795 – a break / close below this threshold would mark downtrend resumption towards lower parallel / 78.6% retracement of the September advance at 1.3714 and the March 2024 high at 1.3614. The next major technical consideration rests with the 1.618% extension / 78.6% retracement at 1.3504/23.
Bottom line: USD/CAD is in a near-term range just above downtrend support- the immediate focus is on a breakout. From a trading standpoint, rallies would need to be limited to the 200-day moving average IF price is heading lower on this stretch with a close below 1.3795 needed to mark resumption.
Keep in mind we get the release of key U.S. inflation data (Core PCE) and Non-Farm Payrolls next week into the monthly cross. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest Canadian Dollar Weekly Technical Forecast for a closer look at the longer-term USD/CAD trade levels.
Key USD/CAD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/CAD shooting star puts September surge on notice
USD/CAD has printed a clear bearish reversal pattern after an extraordinary September surge, but confirmation may depend heavily on how US Treasury yields react to Friday’s payrolls report.
Canadian Dollar Analysis: USD/CAD Returns to July Highs Ahead of NFP
The Canadian dollar continues to face one of its most challenging environments in recent months when it comes to maintaining strength against the U.S. dollar. The weakness of the Canadian currency is clearly reflected in USD/CAD, which has now recorded nine consecutive bullish sessions and gained more than 1.7% during that period.
Gold Price Forecast: XAU/USD Plunges 12.4% Toward Critical Support 10 1 2026
Softer inflation has revived expectations for a Fed pause, but Friday’s payrolls could put gold’s recovery prospects to the test.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.