Canadian Dollar Short-term Outlook: USD/CAD Rejected at Resistance
USD/CAD failed at resistance today with the bears now looking to threaten the June uptrend. Battlelines drawn on the Canadian Dollar short-term technical charts.
Share this:
Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels
- USD/CAD rally fails post CPI / jobless claims- threatens outside-day reversal off resistance
- USD/CAD bears target break of June uptrend- BoC / FOMC interest rate decisions on tap next week
- Resistance 1.3881/99 (key), 1.3925, 1.3978- Support 1.3828/29, 1.3789/90, 1.3729/50 (key)
USD/CAD reversed lower today after failing at technical resistance, shifting the focus back toward uptrend support. While the broader advance remains intact, bears will be looking for a deeper test of the trendline, and the losses will need to be limited for the June uptrend to stay viable. For now, the immediate focus is on a breakout of this week’s range for guidance, with resistance intact just overhead. 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 my last Canadian Dollar Short-term Outlook, we noted that USD/CAD had plunged into, “a key pivot zone at the monthly lows. Risk for price inflection in the days ahead- watch the closes with respect to 1.3729.” Price briefly registered an intraday low at 1.3726 the following day before reversing sharply higher into the September open. A rally of more than 1.2% is exhausting into technical resistance today at 1.3881/99- a region defined by the 2022 high-close and the 2023 swing high. Looking for a larger inflection off this zone with the multi-month rally vulnerable while below.
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 reversing sharply off resistance today on the heels of a weaker than expected jobless claims report. Price is now approaching weekly-open support near the 38.2% retracement at 1.3828/29 with near-term bullish invalidation now raised to the weekly range low / 61.8% retracement at 1.3789/90. Key support remains unchanged at 1.3729/50- a region defined by the 38.2% retracement of the 2021 advance, the September open, and the Mary opening-range lows. A break / close below this threshold would be needed to shift the broader outlook back to the downside in USD/CAD.
A topside breach / close above the weekly range high would mark resumption of the June uptrend with subsequent resistance objectives eyed at August high at 1.3925 and the 2022 high at 1.3977. The next major technical consideration is now eyed at the May high / 38.2% retracement of the yearly decline / 200DMA at 1.4016/18.
Bottom line: USD/CAD failed at technical resistance today with the bears now looking for a test of uptrend support. From at trading standpoint, losses would need to be limited to 1.3790 for the June uptrend to remain viable – for now the immediate focus is on a breakout of this week’s range for guidance.
Keep in mind the Bank of Canada and FOMC interest rate decisions are on tap next week- stay nimble into the releases and 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 Halted at Resistance
- Japanese Yen Short-term Outlook: USD/JPY Awaits Range Breakout
- Australian Dollar Short-term Outlook: AUD/USD Tests Key Resistance
- US Dollar Short-term Outlook: USD Tests Critical Support Zone
Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
Latest market news
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/JPY Weekly Outlook: AI earnings could overshadow the Fed and BoJ
AI sentiment has become a major driver of US Treasury yields and USD/JPY. With Microsoft, Alphabet and Amazon reporting this week, central bank decisions may have competition for traders' attention.
US Dollar Price Action Setups: EUR/USD, USD/JPY, GBP/USD, USD/CAD
The Dollar is working on its second consecutive red week and while sellers didn’t exactly pounce on fresh lows, there’s an opening door for bears to make a move.
Silver forecast: metals liquidation drags XAG/USD into $50-55 support
Silver has broken its July low and slipped into a long-term support zone as the selling in precious metals deepens. The chart shows where the metal could bottom, and next week's Fed decision may decide whether it does.
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.