Canadian Dollar Technical Forecast: USD/CAD Bulls Go For the Break

Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels

USD/CAD attempting to mark fifth-weekly advance- US inflation, NFPs on tap
Bulls attempting breakout of major resistance pivot today- focus on weekly close
Resistance 1.3881/99, 1.3984/99 (key), 1.4115– Support ~1.3830s, 1.3745/73 (key), ~1.3609

USD/CAD surged more than 3.7% off the September lows with the rally now attempting to breach a major resistance zone near the 2023 highs. Battle lines drawn on the USD/CAD weekly technical chart heading into NFPs / November open.

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 a reversal off support at multi-month lows was approaching initial resistance and that, “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.” USD/CAD broke higher that week with price now extending more than 3.7% off the September lows. Note that weekly momentum has also reached the highest levels of the year and a breach above 70 would offer further validation for the breakout of the multi-year consolidation pattern.

The rally attempting to mark a fifth-consecutive weekly advance with USD/CAD now testing pivotal resistance at 1.3881/99- a region defined by the 2022 high-week close (HWC) and the April high-close (HC). A breach / weekly close above this threshold is needed to mark uptrend resumption towards the next major technical hurdle at the 2020 March reversal close / 100% extension of the 2023 advance at 1.3984/99- look for a larger reaction there IF reached. Subsequent resistance is eyed at the 2016 HWC at 1.4115 and the 100% extension of the December advance at 1.4189.

Look for initial weekly support along the median-line (currently near ~1.3830s) backed the 61.8% retracement of the August decline / April high-0clsoe at 1.3745/77- losses should be limited to this threshold IF price is heading higher on this stretch with a break below the median-line threatening a retest of the yearly moving average near ~1.3609.

Bottom line: USD/CAD is attempting to breach technical resistance here into the 1.39-handle and the focus is on a weekly close above this threshold. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to the 1.3745 IF price is heading higher on this stretch with a close above this pivot zone needed to keep the focus on a rally towards 1.3990- an area of interest for possible topside exhaustion / price inflection If reached.

Keep in mind we have major US inflation data on tap into the monthly close with NFPs slated for Friday. Stay nimble into the monthly cross 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

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. 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. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.