USD/CAD Forecast:
- US dollars / Canadian dollars Extending recent sell-off, it fell to its lowest level since September 2022
- The bearish double upper target at 1.2990 is still valid for now
- The near-term market direction depends on how this happens the prices React near trend line support at 1.3150
|
change in |
Longs |
Shorts |
Hey |
| Daily | 3% | 9% | 5% |
| weekly | -5% | -3% | -5% |
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USD/CAD broke below 1.3300 decisively last Thursday, confirming the double top pattern, which is a technical setup that has negative implications for the underlying asset once validated. Immediately after the crash, the pair slid into a free fall, pausing briefly earlier this week, but continuing its decline today, with the exchange rate currently settling at its lowest level since September 2022.
After the recent decline, the USD/CAD pair is looking for a dynamic support area near 1.3150 established by the ascending trend line extending from last year’s April lows. For guidance on the near-term outlook, traders should closely watch how prices react around current levels in the coming sessions, but two possible scenarios are worth highlighting.
Scenario 1: Collapse
If USD/CAD breaks trendline support at 1.3150 in a clear and visible breakout on a daily closing basis, the sellers are likely to undisputedly control the market, paving the way for the next lower stage of a bearish projection of the double top (see chart). This could indicate a move towards 1.3080 before a possible retest of 1.2990, which is the 50% Fibonacci retracement of the June 2021/October 2022 rally.
Scenario 2: rejection
If the bulls avoid the current bearish attack and trigger a market turnaround, the initial resistance will come in at 1.3270. If this barrier is removed, the buyers may regain the upper hand, paving the way for a rise towards 1.3300. There could be more gains for USD/CAD on a push above the 1.3300 handle, with the bulls likely to look to the 50-day Simple Moving Average near 1.3450 on a breakout.
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