Canadian Dollar Technical Forecast: USD/CAD Bulls Charge Resistance
The US Dollar is surging for a second week with a 1.6% rally in USD/CAD now approaching pivotal resistance. Battle lines drawn on the weekly technical chart.
Share this:
Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels
- USD/CAD attempting to mark two-week rally off technical support / September-low
- Bulls testing initial resistance hurdle into monthly highs- threat for topside exhaustion / price inflection
- Resistance 1.3621/47, ~1.3700, 1.3753/73 (key)– Support 1.3517, 1.3471 (key), 1.3342/59
USD/CAD surged nearly 1.6% off the September lows with the rally now approaching the first major test of resistance. Battle lines drawn on the USD/CAD weekly technical chart heading into US CPI.
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 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 had, “plunging back into support at the monthly-open; looking for a reaction down here. From trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops – rallies should be limited to 1.36 IF price is heading lower on this stretch with a close below 1.3471 needed to fuel the next leg.”
Despite registering an intraweek low at 1.3419, the bears were unable to mark a weekly close sub-1.3471 with the subsequent rally taking USD/CAD into confluent resistance this week at 1.3621/47- a region defined by the 38.2% retracement of the August decline and the September swing high. Note that the median-line of the descending pitchfork also converges on this threshold and a weekly close above is needed to suggest a more significant low was registered last month.
Initial weekly support now rests with the September low-week close (LWC) at 1.3517 and is backed again by 1.3471- a break / close below this level is still needed to mark downtrend resumption / validate a break of the 2022 uptrend. The next major lateral consideration rests with the 78.6% retracement / 2024 LWC at 1.3342/60.
A topside breach / close above the September highs / median-line is needed to keep the immediate long-bias viable with subsequent resistance objectives eyed at the 1.37-handle and 1.3745/73- a region defined by the 61.8% retracement and the April high-close (HC). Look for a larger reaction there IF reached with a breach / close above needed to invalidate the August downtrend.
Bottom line: A reversal off support at multi-month lows takes USD/CAD into the first level of technical resistance- risk for possible price inflection here. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to 1.3517 IF price is heading for a breakout here with a close above 1.3647 needed to fuel the next leg higher.
Keep in mind we get the release of key US inflation data this week with the August Consumer Price Index (CPI) on tap Thursday. Stay nimble into the release and watch the weekly close here for guidance. Review my latest Canadian Dollar Short-term Outlook for a closer look at the near-term USD/CAD technical trade levels.
US / Canada Economic Data Release
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts
- Euro (EUR/USD)
- US Dollar Index (DXY)
- Australian Dollar (AUD/USD)
- British Pound (GBP/USD)
- Gold (XAU/USD)
- Japanese Yen (USD/JPY)
- Crude Oil (WTI)
--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
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.