Canadian Dollar Price Outlook: USD/CAD Recovery Eyes Trend Resistance

The Canadian Dollar is on the defensive with the recent US Dollar recovery taking USD/CAD within striking distance of multi-week downtrend resistance. These are the updated targets and invalidation levels that matter on the USD/CAD charts. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

USD/CAD PRICE CHART - DAILY

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USD/CAD Price Chart - US Dollar vs Canadian Dollar Daily - Loonie Outlook

Technical Outlook: In my latest Canadian Dollar Price Outlook we noted that the advance was, “targeting confluence resistance at 1.3357/63- a region defined by the median-line of the descending pitchfork formation extending off the May highs, the 38.2% retracement of recent sell-off, the May swing low and near-term up-channel resistance.” A topside breach on Friday fueled a weekly close just below the 1.3435/37 pivot zone with trendline confluence just higher around ~1.3460s – we’re looking for possible exhaustion off one of these two zones.

USD/CAD 120MIN PRICE CHART

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USD/CAD Price Chart - US Dollar vs Canadian Dollar 120min - Loonie Outlook

Notes: A closer look at Loonie price action shows USDCAD holding within the confines of a descending pitchfork extending off the May highs and the risk remains weighted to the downside while within this formation. Interim support rests back at 1.3357/63 with a break below the median-line needed to mark resumption of the broader June decline targeting 1.3258 & 1.3175/98. A topside breach would keep the focus on subsequent resistance objectives at 1.3495 & 1.3537.

Bottom line: The USD/CAD recovery is now approaching technical resistance targets into 1.3460 and we’re looking for signs of exhaustion in this zone. From a trading standpoint, look to reduce long-exposure / raise protective stops on a move towards the upper parallels – we’ll be looking for a reaction there IF reached. Review my last Canadian Dollar Weekly Price Outlook for a longer-term technical picture on USD/CAD.

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