The USD/CAD exchange rate continued its downward momentum over the past 24 hours, trading near 1.3976 levels, marking a 0.53% decline from the previous trading day’s close of 1.4029. This pullback represents the fourth consecutive day of losses, driven primarily by robust economic data from Canada that has bolstered the Canadian dollar. Market participants attribute the recent weakness in USD/CAD to the strong recovery in Canada’s third-quarter GDP figures, which has attracted investors to long Canadian dollar positions while simultaneously pressuring the U.S. dollar.

For investors, this scenario mirrors the typical market behavior when an economy releases better-than-expected economic growth data—its currency typically gains favor. Throughout this week, USD/CAD has declined from the monthly peak of 1.4112 recorded on November 6th to near the low of 1.3988 on November 28th, representing a decline of approximately 1%. This downward pressure reflects a market reassessment of Canada’s economic outlook, particularly as uncertainty persists regarding U.S. Federal Reserve policy trajectory.

From a technical perspective, USD/CAD faces resistance within an ascending channel and currently finds support around the 1.4050 level. Market expectations suggest the Bank of Canada may maintain its interest rate stance in December, which provides additional support for the loonie. In the near term, traders should monitor the key resistance area near 1.40 and watch for subsequent Canadian economic data releases that may sustain or challenge the current strength of the Canadian dollar.

Daily Chart

The daily chart illustrates USDCAD’s correction since early November within an ascending channel between 1.38 and 1.41. The 50-day moving average (around 1.4020) and 200-day moving average (about 1.3840) serve as key momentum indicators. Prices sit below the 50-day SMA but above the 200-day SMA, signaling resilient overall trend. Bollinger Bands tightening implies reduced volatility; a breakout above the channel upper boundary could prompt further gains. The MACD histogram weakening suggests short-term bearish pressure.

1H Chart

On the hourly chart, USDCAD has shown range-bound behavior within 1.3950-1.4050 over the last five days. The 20-hour SMA and Bollinger middle band provide strong support. A recent MACD golden cross hints at a possible short-term rebound, though resistance breakouts are not yet confirmed. The market remains cautious, awaiting decisive signals.

Technical Trend: Short-term range-bound with a mild upward channel trend overall.

Technical analysis reveals USDCAD approaching pivotal support and resistance levels. The ascending channel on the daily chart remains intact. Short-term MACD and RSI divergences hint at continued volatility before a secure recovery. The hourly chart’s MACD golden cross offers an entry point for bullish trades but awaits volume confirmation. Market participants likely remain cautious ahead of December central bank policies and critical economic data.

Today’s GMT+1 economic calendar shows China’s November Manufacturing and Services PMI at 49.2 and 49.5 respectively, slightly below forecasts. These releases have minimal direct impact on USDCAD, as the Canadian dollar driven by domestic factors dominates recent price action. No major Canadian or US economic events are scheduled today to influence the pair significantly. Traders should remain attentive to upcoming North American data.

Resistance & Support

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