Canadian Dollar Price Outlook: USD/CAD Range Trade – Breakout Levels

The Canadian Dollar surged 0.86% against the US Dollar last week but halted near multi-week lows with USD/CAD continuing to trade within the confines of a well-defined price range heading into a sixth consecutive week. These are the updated targets and invalidation levels that matter on the USD/CAD weekly chart.

CANADIAN DOLLAR PRICE CHART – USD/CAD WEEKLY

(Click on image to enlarge)

 

Canadian Dollar Price Chart - USD/CAD Weekly - US Dollar vs Canadian Dollar Trade Outlook - Loonie Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

Notes: In my latest Canadian Dollar Price Outlook we noted that, “Ultimately, the goal is to sell a higher-high here for a larger correction.” We didn’t get a higher high, but price did test the high the following day before posting an outside-day reversal lower. The move marks the largest weekly decline / range since the weekly of September 19th – that weekly range has continued to govern price for the past five weeks with momentum leveling-off around 50.

USD/CAD is stuck in a range just below key confluence resistance at 1.3355/70- a region defined by the 61.8% retracement of the May decline and the yearly high-week close. A consolidation pattern may be in play here off the September highs but ultimately, we’ll be looking or a break of the 1.3155-1.3370 range for further guidance on our medium-term directional bias. A downside break exposes the yearly low-week close at 1.3059 while a topside breach would shift the focus toward the upper parallel near 1.3467.

Bottom line: USD/CAD is in a range just below critical resistance- the immediate focus is on a break of 1.3155-1.3370 for guidance. From a trading standpoint, the recent decline keeps the risk weighted to the downside targeting the lower bounds of the range – look for exhaustion on this rebound ahead of 1.3280 IF price is heading lower. I’ll publish an updated Canadian Dollar Price Outlook once we get further clarity on the near-term USD/CAD technical trade levels.

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