Canadian Dollar Short-term Outlook: USD/CAD Bulls Keep 2024 Uptrend

Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels

• Canadian Dollar rebounds off 2024 uptrend support– recovers entire weekly loss
• USD/CAD weekly & monthly opening-range breaks pending- US PCE on tap
• Resistance 1.3708, 1.3727, 1.3758- Support 1.3628, 1.3590/99 (key), 1.3536

USD/CAD has rallied 0.6% off the weekly lows after marking a Doji at technical support yesterday. The weekly opening-range is preserved just above a multi-month uptrend and the battle lines are drawn heading into key inflation data with the US Core Personal Consumption Expenditure (PCE) on tap Friday. These are the updated targets and invalidation levels that matter on the USD/CAD short-term technical charts heading into the close of the week / month / quarter.

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 last month’s Canadian Dollar Short-term Outlook we noted that the, “USD/CAD recovery is now testing multi-week downtrend resistance into the 1.37-handle- looking for a reaction here over the next 48-hours. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to the weekly open IF price is heading higher with a close above the monthly open needed to mark uptrend resumption.” USD/CAD consolidated above support for over a week before breaking sharply higher with a price rallying nearly 1.5% into the June open.

The advance exhausted into the 78.6% retracement of the April decline at 1.3791 with USD/CAD shedding more than 1.2% off those highs. A rebound off confluent slope support around the January trendline yesterday (Doji) is in focus with the weekly & monthly opening-ranges preserved heading into the last two-days of June trade

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 trading within the confines of a proposed descending pitchfork formation with the weekly opening-range taking shape just above the median-line. Initial support rests with the objective monthly open at 1.3628 and is backed by key support at 1.3590/99- a region defined by the 200-day moving average, the 38.2% retracement at of the December rally and the December high-day close (HDC).  A break / close below this threshold would be needed to invalidate the January uptrend and threaten a larger trend reversal towards the 100% extension of the April decline at 1.3536 and the 50% retracement at 1.3512.

Initial resistance eyed at the weekly opening-range highs (ORH) at 1.3708 and is backed by the 61.8% Fibonacci retracement of the recent decline at 1.3727. Ultimately a topside breach / above the June high-day close (HDC) at 1.3758 would be needed to validate a breakout of the April downtrend / mark uptrend resumption towards subsequent objectives at 1.3791 and key resistance at 1.3828/56 – look for a larger reaction there IF reached.

Bottom line: USD/CAD has rebounded off multi-month trend support with the weekly & monthly opening-ranges preserved. From a trading standpoint, rallies should be limited to the upper parallel (blue) IF price is heading lower on this stretch with a break below the 200DMA ultimately needed to fuel the next leg.

Keep in mind we are heading into the close off the month / quarter with US inflation data (Core-PCE) on tap into the close of the week- stay nimble into the cross and watch the weekly closes for guidance. Review my latest Canadian Dollar Weekly Technical Forecast for a closer look at the longer-term USD/CAD trade levels.

Key USD/CAD Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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

Follow Michael on X @MBForex