Title: USD/CAD Breaches Key Resistance: Outlook and Technical Analysis
Original source: Economies.com, analysis posted on January 7, 2026.
Author: Economies.com analysts
The USD/CAD currency pair has made a significant technical move by breaching a key resistance level. As of early January 2026, this development has attracted notable attention from both traders and analysts, signaling potential shifts in market sentiment and pointing to possible new price targets for the pair.
In this comprehensive analysis, we will detail the implications of the recent breakout, current price behavior, relevant technical indicators, and macroeconomic factors affecting the US dollar and Canadian dollar. We will also summarize forecasts from other financial institutions and provide a wider strategic overview for traders looking to take advantage of evolving market conditions.
Overview of the Breakout
The USD/CAD pair had been progressing within a short-term range for several sessions before successfully breaking through the resistance level of 1.3375, as identified by Economies.com analysts. The breach of this resistance zone marks the beginning of a potential bullish phase.
According to the original source:
– The breakout is confirmed by the price stability above the 1.3375 level.
– The flattening of the 50-day exponential moving average (EMA50) supports a shift in momentum towards the upside.
– Analysts maintain a short-term bullish strategy unless the currency pair falls back below 1.3375.
Technical Indicators and Chart Analysis
The following indicators and patterns support an ongoing bullish sentiment for USD/CAD:
1. Resistance Break:
– The key technical resistance at 1.3375 has historically acted as a ceiling for price movement. Its breach opens the door for further gains.
2. Moving Averages:
– The 50-day EMA has transitioned from a sideways trajectory to one exhibiting modest upward slope.
– Price is now consistently trading above the 50-day EMA, further indicating strength in short-term trend direction.
3. RSI (Relative Strength Index):
– The RSI is trending above 50, suggesting bullish momentum without signaling an overbought condition yet.
– Values around 60 to 65 typically support a continuation of upward movement with room for further gains.
4. MACD (Moving Average Convergence Divergence):
– The MACD line has crossed above the signal line, another strong bullish indicator.
– Histogram bars are expanding upwards, reflecting increasing market interest and buying pressure.
5. Price Action Strategy:
– The pair demonstrates higher lows and higher highs on intraday charts.
– Candlestick patterns near the breakout show strong bullish bodies, indicating determined market conviction.
6. Bollinger Bands:
– Bollinger Bands have widened, which usually correlates with increased volatility and price expansion.
– Price is now aligned towards the upper band, indicating sustained upside momentum.
Next Potential Targets
Upon the confirmation of the 1.3375 breakout, technical analysis points to the following price targets in the coming sessions and weeks:
– First Target: 1.3500
– A psychologically significant round number and a recent high seen during November-December 2025.
– Intermediate Resistance: 1.3625
– A historical pivot zone where the pair saw indecision in Q3 2025.
– Extended Target: 1.3755
– This level aligns with resistance formed in late Q2 2025 and acts as a medium-term bullish goal.
Uptrend remains valid as long as price sustains above the former resistance (now support) at 1.3375.
Fundamental Drivers of USD/CAD Movement
While technical indicators suggest a bullish shift, it’s critical to comprehend the fundamental dynamics pushing the pair upward.
1. U.S. Dollar Strength:
– Recent economic data out of the United States, including better-than-expected Non-Farm Payroll (NFP) and ISM Manufacturing Index, suggests ongoing strength in the labor market and output.
– The
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