Canadian Dollar Short-term Outlook: USD/CAD Hits Uptrend Resistance
USD/CAD is poised for breakout with the weekly opening-range taking shape just below multi-month trend resistance. Battlelines drawn on the short-term technical charts.
Share this:
Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels
- USD/CAD breaks out of February downtrend on six-day advance– fails at resistance post-NFP
- USD/CAD threatens outside-day reversal- risk for further weakness into start of August
- Resistance 1.3881/99 (key), 1.3928, 1.3978- Support 1.3729/50, 1.3670 (key), 1.3571/90
The U.S. Dollar plunged today on the heels of a disappointing jobs report today with USD/CAD reversing sharply from technical resistance. A breakout of a multi-month downtrend is being tested into the August-open and the focus is on this pullback into the monthly opening-range. 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 was testing, “resistance at 1.3729/50- a region defined by the 38.2% retracement of the 2021 rally and the May opening-range lows. Note that pitchfork resistance converges on this threshold over the next few days and further highlights the technical significance of this key zone- looking for a reaction off this mark this week.” USD/CAD reversed sharply off resistance in the following days with price plunging more than 1.4% off the monthly high. Last week’s rebound broke out of the February downtrend with the recent Fed-induced rally taking price into resistance in early US trade at the 2022 high-close / 2023 swing high at 1.3881/99.
Today’s post-NFP sell-off is poised to mark an outside-day reversal off fresh multi-week highs and while last month’s breakout does threaten a larger USD/CAD recovery, the advance may be vulnerable into the August open. The focus now shifts to the August opening-range which is taking shape just below confluent resistance.
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 within the confines an ascending pitchfork extending off the July low with today’s pullback finding support at the median-line. Initial support rests at 1.3729/50 and is backed by the 61.8% retracement of the June advance at 1.3670. Note that the lower parallel converges on this threshold into the start of the month and a close below this slope would be needed to suggest a more significant high is in place / a larger reversal is underway. Ultimately, a close below the yearly low-day close (LDC) / May, Junee, and July lows at 1.3571/90 is needed to mark resumption of the broader downtrend.
A topside breach above the 1.39-handle is needed fuel the next leg of the advance with subsequent resistance objectives eyed at the 1.618% extension of the July advance at 1.3928 and the 2022 high at 1.3978. The next major technical consideration is eyed at the May high / 38.2% retracement of the yearly range / 200DMA at ~1.4016/41- look for a larger reaction there IF reached.
Bottom line: The USD/CAD breakout is being tested into the August open. From a trading standpoint, losses would need to be limited to 1.3670 IF price is heading higher on this with a close above 1.39 needed to mark uptrend resumption.
Keep in mind we are in the early throws of the monthly opening-range with the U.S. tariffs set to take effect and key Canadian employment data on tap next Friday. Watch the weekly closes 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
- British Pound Short-term Outlook: GBP/USD Rally Unravels Ahead of Fed
- Australian Dollar Short-term Outlook: AUD/USD Bulls Eye Breakout
- Gold Short-term Outlook: XAU/USD Breakout Eyes Record Highs
- Swiss Franc Short-term Outlook: USD/CHF Rejected at Resistance
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
Nikkei breakout accelerates as yen weakness returns
Nikkei has started October with a powerful breakout, helped by renewed yen weakness and strong upside momentum
AUD/USD hammered by US yields and fading RBA hike bets
US yields, dollar strength and fading RBA hike bets have combined to drive AUD/USD to fresh multi-month lows. The macro and technical bias remains bearish, although history suggests parts of the move are now reaching unusually stretched levels.
Canadian Dollar Forecast: USD/CAD Four-Week Rally Eyes Yearly Highs 9 30 2026
USD/CAD has advanced in 14 of the past 15 sessions, but stretched momentum raises the stakes as major resistance and NFP come into focus.
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.