News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Canadian Dollar Price Outlook: Loonie Drop Threatens USD/CAD Breakout

Canadian Dollar Price Outlook: Loonie Drop Threatens USD/CAD Breakout

James Stanley, Senior Strategist

Canadian Dollar, USD/CAD Price Analysis

  • As the US Dollar has continued to fall, USD/CAD has continued with strength.
  • This highlights how the Canadian Dollar has recently been even weaker than the US Dollar.
  • Can USD/CAD break out to fresh highs?

USD/CAD Rallies into Resistance

It’s been a continuation of fear so far through this week, with a possible turning point in a number of risk markets starting to show. The US Dollar, in particular, has been in focus as last week’s breakout and Thursday’s push to fresh three-year-highs has quickly unwound. But, over the past half-of-a-day, support has held: Buyers appear to be getting just a little bit more aggressive, and this highlights the potential for a return of USD-strength. That support build comes in around the 38.2% retracement of the February rally in the currency; and this highlights a very interesting strategy component in the USD/CAD pair.

US Dollar Four-Hour Price Chart

US Dollar Four Hour Price Chart

USD on Tradingview

USD/CAD for USD-Strength Strategies

As looked at a couple of different times over the past week, USD/CAD could remain an interesting candidate for strategies of USD-strength; largely on the basis of Canadian Dollar weakness, which has recently outdone that of the US Dollar.

I had looked into a setup last week that could work towards bullish continuation strategies: Following a robust trend through January and the first week of February, price action finally found some element of resistance around the 1.3306 marker, which is the 50% level of the 2019 major move in the pair. Buyers pushed slightly beyond that price, albeit temporarily, only for follow-through resistance at the November highs to come into play; helping to thwart the advance and stop buyers in their tracks.

But, as discussed in yesterday’s webinar – the devil is in the details. Following lower-highs in October and November, this was the first bullish advance that had the strength to move up to test a prior multi-month high. Even the pullback in the pair has remained in somewhat of an orderly format, discussed last week, as prices formed a falling wedge that took on the resemblance of a bull flag formation.

USD/CAD Four-Hour Price Chart

usdcad USD/CAD Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

USD/CAD Near-Term Strategy

At this point, the bullish bias in the pair remains given the continuation of higher-highs and higher-lows, and on a shorter-term basis, breakout potential shows as price action is testing this key level right now. Just beyond this level is the November and February swing highs, coming in around 1.3328; after which the October high lurks at 1.3347. Beyond that – the September high is at 1.3383, and this is confluent with a Fibonacci level at 1.3391 to create a zone of potential resistance. Next up would be the June swing high at 1.3433; after which the 1.3500 psychological level can come back into play for the first time since May of last year.

USD/CAD Daily Price Chart

USDCAD USD/CAD Daily Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

--- Written by James Stanley, Strategist for

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.