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Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels
- USD/CAD rips to fresh yearly highs as Trump threatens 25% tariff on Canada.
- USD/CAD rally exhausts into uptrend resistance- rally may be vulnerable near-term.
- Resistance 1.4189-1.42 (key), 1.4357, 1.4538– Support 1.3984/90, 1.3881/99 (key), 1.3773
The US Dollar surged to a fresh yearly high against the Canadian Dollar this week with USD/CAD ripping on tariff comments from President Trump last night. The advance was halted at uptrend resistance and while the technical outlook remains constructive, the immediate rally may be vulnerable into the close of the month. Battle lines drawn on the USD/CAD weekly technical chart.
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 my last Canadian Dollar Technical Forecast we noted that USD/CAD had set the November opening-range, “just above slope support- look for the breakout. From a trading standpoint, losses should be limited to this week’s low IF price is heading higher on this stretch with a breach / close above 1.3990 needed to fuel the next major leg of the advance.”
Price ripped higher the following week with rally extending nearly 2.6% off the monthly low. Remarks from President Trump threatening 25% tariffs on Canada and Mexico sent USD/CAD to fresh yearly highs after the close of the US session. The rally exhausted today into the upper parallel of the ascending pitchfork we’ve been tracking off the September low and the focus is on a reaction of mark.
Initial weekly support rests 1.3984/90 and is backed by 1.3881/99- a region defined by the 2022 high-week close, the 38.2% retracement of the September advance, and the 2023 swing high. Note that the median-line converges on this threshold over the next few weeks and a break / close below would be needed to suggest a more significant high was registered today / threaten a larger correction. Subsequent support seen at the April high-close near 1.3773 with broader bullish invalidation now raise to the 61.8% retracement at 1.3709.
Initial resistance stands with the 2016 HWC at 1.4115 with key resistance steady at the 100% extension of the December advance at 1.4189. Ultimately a breach / close above the upper parallel would be needed to fuel the next major leg of the advance towards subsequent resistance objectives at the 2020 HWC at 1.4357 and the 2016 close high at 1.4538- both levels of interest for possible topside exhaustion / price inflection IF reached.
Bottom line: The USD/CAD rally extended into uptrend resistance today and while the broader outlook remains constructive, the immediate advance may be vulnerable here. From a trading standpoint, pullbacks would need to be limit e to 1.3881 IF price is heading higher on this stretch with a close above 1.42 needed to fuel the next leg of the advance.
Keep in mind we are heading into an extended holiday break with key US inflation data on tap tomorrow. Stay nimble into the monthly cross and watch the weekly closes here for guidance. Review my latest Canadian Dollar Short-term Outlook for a closer look at the near-term USD/CAD technical trade levels.
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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
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