Canadian Dollar Outlook: USD/CAD Macro Breakout in Progress
Canadian Dollar Highlights:
- USD/CAD working on a long-term breakout
- After last year’s historically small trading range it could be big
USD/CAD working on a long-term breakout
USD/CAD is on the verge of confirming what could turn out to be a major development as we roll towards a new week of trading. And it’s been a while in the making if the pair does indeed take out some key levels soon.
To provide a little backdrop, USD/CAD spent last year in a range tighter than any in it’s been in since 1996. It also did so by becoming increasingly quieter as the year rolled on, as there weren’t any perceived threats in the FX market. That has obviously changed in recent weeks.
USD/CAD is working on clearing the trend-line from the 2016 spike-high that has a parallel tied neatly to it running under the 2016/17 lines. The symmetry is eye catching. That is the first hurdle, the second is the September 2019 high, which if crossed will provide confirmation of the trend-line break.
Pulling back a bit further to the longer-term chart, the base-building process since May 2016 suggests at some point we could see USD/CAD challenge the 2016 highs at 14689. But first thing is first, in the week ahead need to maintain a rally above the 2016 trend-line, with 13565 and 13660 up next as resistance.
USD/CAD Daily Chart (in breakout territory)
USD/CAD Weekly Chart (macro move higher in the works)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.