Canadian Dollar Forecast: USD/CAD Slams Support After Largest Daily Range Since April 1 27 2026

Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels

• USD/CAD plunges more than 2.6% off monthly high with price breaking below multi-month uptrend
• Bears targeting multi-year support slope near 2025 swing low – focus on whether this zone can stabilize the move or gives way to further losses.
• BoC & FOMC rate decisions on tap tomorrow-
• Resistance 1.3669, 1.3724/34 (key), 1.3929/66– Support 1.3540 (key), 1.3431, 1.3360/66

USD/CAD volatility surged today with price marking the largest single-day range since April and the biggest daily loss since early December. The breakdown takes the bears within striking distance of a multi-year trendline near the 2025 low, an area that now serves as a critical checkpoint for the move. Price behavior around this zone will be important in determining whether losses extend toward deeper support or pause for consolidation. Battle lines drawn on the USD/CAD weekly technical chart heading into the Bank of Canada and Fed rate decisions tomorrow.

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Canadian Dollar Price Chart – USD/CAD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView

Technical Outlook: In my last Canadian Dollar Technical Forecast we noted that, “A nine-day rally takes USD/CAD into pivotal resistance, and the focus is on a reaction off this mark. From a trading standpoint, losses should be limited to 1.3733 IF price is heading higher on this stretch..” USD/CAD failed at median-line resistance the following week with price reversing sharply last week to post the largest single week decline since May. A break below the lower parallel (blue) and the 78.6% retracement of the June advance today near 1.3669 fueled another leg lower with USD/CAD now down more than 2.6% off the monthly highs.

The 2023 trendline is offering some support here with the 2025 swing low just lower at 1.3540. A break / weekly close below this threshold would be needed to fuel the next major leg of the decline with subsequent support seen at the 100% extension of the November selloff at 1.3431 and 1.3360/66- a region defined by the 2024 low-week close (LWC) and the 61.8% extension of the broader 2025 decline. Both areas represent zones of interest for possible downside exhaustion / price inflection IF reached.

Weekly resistance is now eyed at 1.3669 and is backed closely by the 2026 yearly open & the 2025 LWC at 1.3725/34. A breach / weekly close above this threshold would be needed to suggest a more significant low is in place and a larger recovery is underway (bearish invalidation). Subsequent resistance is eyed at the yearly high and the May high-week close (HWC) at 1.3929/66- strength beyond this region would put the broader uptrend back in focus.

 

Bottom line: USD/CAD broke below multi-month support this week with today’s selloff marking the largest daily loss in six-weeks. The decline takes price into slope support near the 2025 swing lows ahead of tomorrow’s BoC and FOMC rate decisions and the focus is on a reaction off this mark in the days ahead. From at trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be limited to 1.3669 IF price is heading lower on this stretch with a close below 1.3540 needed to fuel the next leg of the decline.

Keep in mind that both central banks are widely expected to leave rates unchanged tomorrow and the focus will be on the subsequent presser with Chair Powell. In his December remarks, Powell stated that there were risks on both sides of the mandate as concerns of further deterioration in the labor markets and higher inflation continued to rise. With the recent employment data showing resiliency in the labor market (unemployment falling to 4.4% & better-than expected weekly jobless claims) the central bank may be reluctant to cuts rates further as inflation remains well-above the 2% target.

If the commentary highlights an increased focus on the inflation front, the markets may have to reprice expectations for two rate cuts this year and could temper risk appetite in the weeks ahead and offer a reprieve to the battered US Dollar. Fed fund futures are currently pricing a 70% chance that the central bank will be on hold through April with a 65% chance the first rate cut of the year will be delivered at the June rate decision. Keep an eye on this post-FOMC and watch the weekly close on USD/CAD for guidance. Review my latest Canadian Dollar Short-term Outlook for a closer look at the near-term USD/CAD technical trade levels.

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--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex