Over the past 24 to 48 hours, the USD/CAD currency pair has demonstrated notable volatility, with the rate hovering around and attempting to break the key 1.4200 level from yesterday’s close of 1.42173. Following the release of the US Non-Farm Payroll data, the US dollar briefly softened but quickly stabilized, allowing USD/CAD to regain upward momentum.

Lower oil prices have weighed on the Canadian dollar, providing support for the USD/CAD pair as traders await a potential breakout from its trading range. Citi’s recent upgrade of the USD/CAD target to 1.43, combined with upcoming Canadian CPI figures and central bank speakers, keeps market sentiment cautiously bullish.

For the average investor, this means that despite a brief dip after softer US jobs data, USD/CAD remains supported near the 1.42 level amid mixed pressures from oil prices and Canadian economic indicators. Watching upcoming economic releases and policy comments will be critical for anticipating the next significant move in the pair.

Daily Chart

On the daily chart, USDCAD has exhibited a steady uptrend since mid-June, trading above the 50-day moving average (around 1.3954) and 200-day moving average (approx 1.3809), confirming a long-term bullish structure. Bollinger Bands show slight widening, indicating increasing volatility but a positive bias. The MACD histogram has recently contracted, suggesting momentum is cooling but still positive. A rising wedge triangle pattern formed near the 1.4200 level was broken to the upside, signaling potential acceleration toward the yearly high near 1.4248.

1H Chart

The last 3-5 days on the hourly chart reveal a consolidating bullish trend, with recent candlesticks exhibiting long lower shadows characteristic of hammer patterns, signaling strong buying support. Price is sustaining above the 1.4154 support level and oscillating around the Bollinger Bands’ midline. The MACD has formed a bullish crossover and RSI is near 60, indicating strengthening short-term buying momentum and the potential for further upward moves in the near future.

Technical Trend:  USDCAD is currently in a decisively bullish uptrend.

Technically, USDCAD has decisively reclaimed the 1.4200 support area, maintaining a bullish structure. The breakout from the ascending triangle on the daily chart accompanied by hammer candlestick patterns on the hourly chart confirms positive momentum. The MACD bullish crossover supports continuation, while RSI remains comfortably below overbought zones, indicating further upside potential. It remains crucial for bulls that the 1.4154 level holds as a firm base, preventing short-term corrections. A sustained push toward 1.4248 could usher in renewed bullish momentum.

Today, in GMT+1 timezone, there are no major direct US-Canada economic releases scheduled before USDCAD’s core trading hours. However, Canada is due to release the Ivey Purchasing Managers Index at 16:00, forecasted to improve to 59.1. A higher than expected reading could bolster the Canadian dollar, potentially tempering USDCAD’s upside in the short term. The US will release its Trade Balance at 14:30, but unless the figures surprise significantly, the impact on USDCAD is expected to be limited. Overall, no immediate volatile triggers are expected during Asian or early European trading hours.

Resistance & Support

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