Over the past 24 to 48 hours, the USDCAD exchange rate has shown a volatile rebound movement, hovering around 1.3770 to 1.3800, slightly above yesterday’s closing price of 1.37833. The Canadian dollar experienced a brief rally followed by a pullback, reflecting the market’s rapid reaction to mixed bullish and bearish signals between the commodity currency and the US dollar.

A key recent development is the US blockade on Venezuela boosting oil prices, which is favorable for Canadian oil producers, given Canada’s status as a major oil exporter. Meanwhile, the US dollar softened after the latest US non-farm payroll report showed a rise in unemployment, causing pressure on the dollar during certain trading sessions, leading to a short-lived dip followed by a rebound in the USDCAD rate.

For an average investor, this is like oil prices temporarily supporting the Canadian dollar, but uncertainty in the US labor market has made investors cautious, causing the currency pair to fluctuate within the 1.37 to 1.38 range. This dynamic underscores the vulnerability and flexibility of both currencies amid intersecting global macroeconomic factors.

The overall market tone remains cautious as investors await upcoming US and Canadian policy moves and economic data, which will be crucial in determining the medium-to-short-term trend of USDCAD.

Daily Chart

The daily chart reveals a sustained downtrend for USDCAD from the yearly high of 1.47926. Since mid-November, the pair has formed a clear descending triangle pattern nearing the 1.38 resistance level today. The 50-day (around 1.3977) and 200-day (around 1.3841) moving averages lie above price, confirming the longer-term bearish bias. Bollinger Bands are narrowing, hinting at a volatility squeeze and potential breakout. The MACD remains in negative territory but is approaching the signal line, suggesting a possible short-term rebound. Overall, the daily chart indicates a medium-term downward trend with important resistance levels to overcome.

1H Chart

On the hourly chart, USDCAD shows a mild rebound over the last 3-5 days, recovering from a low near 1.3730 to around 1.3780. The price oscillates near the middle Bollinger Band, with 20- and 50-period moving averages intertwining, indicating no definitive trend in the short term. MACD and RSI hover in neutral zones, reflecting lack of strong momentum. A small descending wedge has formed, where a break above 1.38 could trigger buying interest, while failure to break may resume declines. The short-term technical pattern suggests consolidation awaiting a decisive breakout.

Technical Trend:  Currently, USDCAD is in a cautiously bearish medium-term downtrend with volatile sideways action in the short term.

Technically, the daily descending triangle pattern is the dominant formation dictating USDCAD’s near-term direction. A successful break above the 1.38 resistance could spark a short-term bullish rally or even medium-term trend reversal. Conversely, failure to break this level increases the odds of continuation toward the year’s lows near 1.3539. The hourly chart’s descending wedge hints at limited short-term buying opportunities but is dependent on upcoming macro data. There is no strong recent candlestick pattern signalling immediate reversal, so traders should await clearer signals before committing.

Today’s economic calendar holds no direct Canadian or US releases before the critical 14:30 GMT+1 slot when US Consumer Price Index (CPI) data for November will be released. Inflation numbers are expected to slightly rise year-over-year, maintaining market focus. Stronger-than-expected CPI could boost the USD and pressure USDCAD lower, while weaker data may favor the Canadian dollar. Other global economic events today have limited impact on USDCAD. Monitoring the US CPI release is key for anticipating immediate price reactions.

Resistance & Support

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