**USD/CAD Weekly Technical Outlook (Adapted and Expanded)**
*Original source: ActionForex.com by ActionForex team*
The USD/CAD pair concluded the previous week with limited directional drive, trading in a relatively narrow range. This consolidative activity reflects market hesitation following recent economic data and ahead of key upcoming catalysts. Overall, the pair remains capped below 1.3845 resistance, unable to gather enough momentum to challenge this level decisively. The near-term outlook remains neutral, although price action suggests that the bias may be progressively shifting in favor of renewed bullish potential—if support levels hold.
This outlook combines the insights shared by ActionForex with additional technical analysis and macroeconomic context to provide a deeper understanding of USD/CAD’s current and potential future direction.
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## Technical Review — USD/CAD
The current price pattern of USD/CAD appears to be forming a triangle-like consolidation since the March high at 1.3845. This signals that market participants are indecisive in the short term as they process mixed economic data and central bank signals. The pair has yet to initiate a clear breakout in either direction.
– **Current Key Resistance**: 1.3845, established on March 20, remains a strong ceiling. USD/CAD attempted to re-test this level but was met with consistent selling pressure back toward support.
– **Immediate Support**: 1.3611 is a critical level; a break below this could invalidate the short-term bullish setup and signal a deeper correction.
– **Secondary Support**: Below 1.3611 lies 1.3486, the lower bound of the recent trading range.
Given the lack of a decisive breach of either support or resistance, USD/CAD is likely stuck within a range-bound phase. This consolidation could represent a pause before the next significant move, depending on whether the next breakout is above resistance or below support.
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## Moving Averages and Momentum Indicators
A look at the broader trend through moving averages and oscillators provides deeper insights into the pair’s health:
– The **50-day Simple Moving Average (SMA)** is hovering close to current price levels, suggesting a neutral tone in the short term.
– The **200-day SMA** lies below the current price, indicating that the medium-to-long-term trend remains skewed slightly upward.
– The **Relative Strength Index (RSI)** on daily charts is sitting near the 50 level, further emphasizing the lack of strong directional momentum.
– **MACD Histogram** has flattened out, suggesting momentum is currently on pause but could rapidly shift with a catalyst.
If buyers can clear 1.3845 with conviction, the pair could embark on a bullish continuation towards the 1.4000 psychological level. A breakdown below support at 1.3611, on the other hand, would place pressure on the bulls and potentially open downside toward 1.3486 or even lower.
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## Elliott Wave Perspective
From an Elliott Wave standpoint, the price action since the March high could be interpreted as forming a triangle within a larger corrective wave, which could be Wave IV in a bullish sequence. If accurate, a breakout above 1.3845 may confirm the onset of Wave V, targeting new highs and pushing the pair further into bullish territory.
This wave count also aligns with the broader bullish structure that has unfolded since the 2021 lows. However, traders should wait for confirmation of the breakout before relying on this perspective.
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## Fundamental Drivers and Upcoming Events
Several macroeconomic themes are influencing the USD/CAD price action:
### USD Outlook
– **Federal Reserve Policy**: The Federal Reserve has adopted a data-dependent stance regarding rate cuts. Despite earlier expectations for rate reductions in the second half of 2024, persistent inflationary pressures and strong economic indicators (especially labor market data) may delay rate cuts. This supports demand for the dollar and limits downside for USD/CAD.
– **US Economic Data**: Recent CPI figures
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