**USD/CAD Weekly Technical Outlook and Market Analysis**
*Source: Adapted and expanded from the original article by ActionForex.com*
The USD/CAD pair concluded last week with a subdued tone, caught between competing forces of oil price fluctuation, mixed economic signals from both the United States and Canada, and shifting interest rate expectations. While the currency pair experienced significant volatility mid-week, overall momentum remained limited as traders weighed incoming economic data for additional directional cues.
From a technical perspective, the pair continues to oscillate within a broad consolidation pattern. As of last week’s close, traders remain indecisive, with USD/CAD sitting near neutral territory on the daily and weekly charts. Let’s break down the key technical benchmarks, fundamental drivers, and economic developments influencing the current outlook of the USD/CAD pair.
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## Weekly Summary and Closing Behavior
– USD/CAD ended the week marginally lower, failing to maintain directional momentum above the 1.37 handle.
– Price action was largely sidelined with multiple failed attempts to breach resistance around 1.3790.
– On the downside, immediate support held firm near 1.3600, showcasing a defined trading range without clear breakout conviction.
– Modest bearish bias emerged but lacked confirmation through volume or momentum-based indicators.
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## Technical Analysis
### Trend Direction and Price Structure
– On the **weekly chart**, the pair remains within a horizontal consolidation between 1.3600 and 1.3845.
– The **daily chart** shows lower highs in recent sessions, hinting at gradual downward pressure, although not strong enough to suggest a trend reversal.
– **RSI (Relative Strength Index)** on the daily time frame dipped below 50 but is not in oversold territory, indicating a wait-and-watch sentiment among traders.
– **MACD (Moving Average Convergence Divergence)** remains slightly negative, confirming the lack of bullish dominance in the near term.
### Key Support Levels
– 1.3600: Strong demand zone; holds as the first major support after multiple tests.
– 1.3495: A key short-to-medium term pivot. A sustained break below this level would suggest a deeper correction.
– 1.3350/1.3360 region: Acts as a longer-term floor from March and June of this year.
### Key Resistance Levels
– 1.3790: Immediate resistance aligned with early May highs.
– 1.3855: Multi-month resistance and a critical level from December 2023.
– 1.3976: High last seen in October 2023 and would represent a significant breakout if breached.
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## Moving Averages Outlook
– **50-day SMA**: Currently acting as dynamic support near 1.3620. Any firm break below would increase bearish sentiment.
– **200-day SMA**: Located around 1.3530. A break beneath the 200-day moving average would mark a significant technical shift in trend, potentially ushering in a more prolonged downside bias.
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## Fibonacci Retracement Analysis
Applying a Fibonacci retracement from the 1.3176 swing low (January 2024) to the 1.3845 high (April 2024):
– 38.2% Retracement: Around 1.3580 (short-term support zone).
– 50% Retracement: Near 1.3510, which coincides with long-term SMA support.
– 61.8% Retracement: Located at 1.3445, a definitive zone to monitor for trend resumption or full reversal.
A break below the 50% or 61.8% levels would confirm a deeper pullback and potentially alter USD/CAD’s broader directional bias.
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## Fundamental Drivers Impacting USD/CAD
### US Dollar Dynamics
– The US dollar saw fluctuating momentum, in part due to mixed economic indicators. While the labor market remains tight, inflation data has not provided
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