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Canadian Dollar Forecast: USD/CAD Range Set up to Break Soon

CAD Technical Forecast: Neutral until breakout

  • USD/CAD is stuck in a trading range at the moment
  • There are key bottom and top-side levels to watch
  • Move in either direction will bring big long-term levels into play

Canadian Dollar Forecast: USD/CAD Range Set up to Break Soon

USD/CAD has been chopping around the past couple of weeks, but that is likely to change soon. There are thresholds on both sides that if they break will have price running towards one long-term level or another.

A breakout above 12712 is seen as leading USD/CAD toward major long-term resistance around the 12950 level. This level dates to December 2019 and has been in play on several occasions, with its most recent inflection point occurring in December.

If the range breaks to the downside beneath 12632, look for selling to take USD/CAD down to confluent support. This support is made up of a trend-line from the June 1 low and 200-day moving average. A big spot, indeed.

We may not see a clean break develop just yet, but if this the case then the extended period of sideways price action could make for an even stronger move when a breakout does occur. We could also see a fake-out move from the range, then a reversal through the other side of it. We will want to be nimble in the event we do get a shake-out move first.

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USD/CAD Daily Chart

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USD/CAD Charts by TradingView

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—Written by Paul Robinson, Market Analyst

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https://www.tradingview.com/symbols/USDCAD/