Skip to Content
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.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Canadian Dollar Outlook: USD/CAD Rally Looks to Have Staying Power

Canadian Dollar Outlook: USD/CAD Rally Looks to Have Staying Power

What's on this page

Canadian Dollar Highlights:

  • USD/CAD breakaway gap looks legitimate on volatility explosion
  • We may see some backing-and-filling in days ahead but generally bullish

USD/CAD breakaway gap looks legitimate on volatility explosion

In last week’s forecast, USD/CAD was in focus as a potential breakout candidate with volatility having yet caught fire like it did in other currency pairs. With the shocking move in oil that quickly changed – 3-month implied volatility rocketed from 5.25 to over 11 by Thursday. A massive move indeed, and with it a 5-figure move in USD/CAD up to 13961.

The gap on the Sunday gap was an unusual occurrence in FX, and often times these are filled quickly. But given where it took shape, after breaking out above the 2016 trend-line and resistance from H2 of last year, it has the makings of a longer-term bullish breakaway gap.

If this is the case, then at worst the bottom of the gap around 13517 will be tested but not broken with any meaning. If USD/CAD is indeed as bullish as the breakout and run last week suggests, then that likely won’t come under threat. But still a period of sideways trading may unfold as the market digests the initial burst.

Next week might not bring rip-roaring price action, but will be well worth paying attention to as it could give some good signaling as to whether it wants to make another run in the relatively near future. A consolidation pattern could go a long way towards firming up a short-term breakout pattern with good risk/reward.

USD Forecast
USD Forecast
Recommended by Paul Robinson
Check out where our analysts see USD heading.
Get My Guide

USD/CAD Daily Chart (in breakout territory)

USD/CAD Daily Price Chart

USD/CAD Chart by TradingView

USD/CADWeekly Chart (macro move higher in the works)

USD/CAD Weekly Price Chart

USD/CAD Chart by TradingView

Forex & CFD Trader Resources

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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.

DISCLOSURES