Canadian Dollar Technical Forecast: USD/CAD Aims to Break 1.280

USD/CAD Technical Outlook: Neutral

• USD/CAD Aims higher after the release of a US, Canadian employment data
• US Dollar strength limits Canadian Dollar gains
• Will oil prices continue to support CAD?

The loonie has recently remained under pressure against the greenback after the release of US, Canadian employment data, driving prices above the 1.270 handle.

Although a positive NFP report and negative Canadian employment data limited USD/CAD losses, allowing bulls to regain confidence over the trend.

To learn more about how to trade USD/CAD , check out our  DailyFX Education  section.

Although fundamental factors continue to drive risk sentiment, additional catalysts for price action include commodity prices and the upcoming inflation data.

USD/CAD Technical Analysis

After two consecutive weeks of gains, USD/CAD bulls ran into a wall of resistance at 1.2806, the 76.4.% Fibonacci retracement level of the October – December 2021 move.

As buyers and sellers battle it out, the development of a potential spinning top candle on the weekly time-frame is indicative of indecision as prices track the 10-period moving average (MA).

USD/CAD Weekly Chart

Chart prepared by Tammy Da Costa using TradingView

Meanwhile, after breaking above trendline resistance on the daily time-frame, price action temporarily climbed towards the above-mentioned level (1.2806) currently holding as immediate resistance while the CCI (commodity channel index) threatens overbought territory.

If bulls manage to drive prices higher, a break above 1.285 and 1.2900 (a key psychological) leaves the door open for the December 2021 high at 1.296.

USD/CAD Daily Chart

Chart prepared by Tammy Da Costa using TradingView

--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707