Canadian Dollar Forecast: USD/CAD Coils into Canada Inflation

Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels

Canadian Dollar consolidating within November opening-range- July rally vulnerable
USD/CAD breakout pending – key inflation data from Canada on tap next week
Resistance 1.3881, 1.3950/90, 1.4115 – Support 1.3640, 1.3545, ~1.3505

The Canadian Dollar rallied just 0.5% against the US Dollar this week with USD/CAD continuing to contract within the November opening-range. While the broader July rally remains intact, the focus now shifts to a breakout of this range for medium-term guidance with major event risk on tap next week. These are the updated targets and invalidation levels that matter 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 was testing a major hurdle around the 1.37-handle and that, “A topside breach / close above this resistance confluence exposes subsequent objectives into the 2023 high-close at 1.3804 and the 2022 high-week close at 1.3881.” Price surged more than 1.5% higher the following week with USD/CAD briefly registering an intra-day high at 1.3899 before reversing sharply into the November open. The monthly opening-range is defined by this four-day decline with USD/CAD in consolidation over the past few weeks.

Confluent support rests with the September high-week close at 1.3640 – a break / weekly close below this threshold would threaten the broader July advance with such a scenario exposing the objective yearly open at 1.3545 and the 52-week moving average, currently ~1.3505 (look for a larger reaction there IF reached).

Weekly resistance unchanged at 1.3881 with 1.3950/90 still critical. This region is defined by the 1.618% Fibonacci extension of the 2021 advance, the 2022 swing high, and the 2020 March reversal close- a breach / close above is needed to mark resumption of the broader uptrend towards the 2016 high-week close at 1.4115.

Bottom line: USD/CAD is consolidation within the November opening-range, just above multi-month uptrend support- look to the breakout for guidance here. From a trading standpoint, we’re looking to validate a possible exhaustion high as price struggles to breach the objective 2023 range. Ultimately, a larger setback may offer more favorable opportunities with a close above 1.3990 needed to mark uptrend resumption. Keep in mind we have key Canada inflation data on tap next week- watch the closes here. 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 Releases

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 Twitter @MBForex

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.