USD/CAD Weekly Forecast: Key Levels to Watch as Pair Tests Range Boundaries

Despite experiencing some volatility last week, USD/CAD continues to trade within a defined range above 1.3730. For the upcoming week, initial market sentiment appears balanced as traders assess near-term direction. The pair’s failure to breach the 38.2% retracement level at 1.3927—measured from the 1.4247 to 1.3730 decline—suggests the downward momentum from the 1.4247 peak remains intact. On the bearish side, a break below 1.3730 could trigger a retest of the 1.3480 support zone. However, a decisive move above 1.3927 would signal a shift in momentum back toward the upside, potentially setting the stage for a stronger rebound.

Looking at the broader trend, the technical structure originating from the 2025 high of 1.4791 remains unresolved, with the recent decline from 1.4247 likely representing the third downward wave. A firm break below the 1.3480 support level could accelerate selling pressure, opening the path toward the 100% projection target at 1.2936—derived from measuring the 1.4791-to-1.3480 move from 1.4247. Until the 1.4247 resistance is reclaimed, downside risks persist, particularly during any temporary rebounds.

From a longer-term perspective, bearish divergence in the monthly MACD indicates that the decline beginning at 1.4791 may be correcting the entire uptrend that started from the 2007 low of 0.9056. Continued weakness below the 1.3480 support—and sustained trading beneath the 55-month EMA, currently near 1.3640—could set the stage for a move toward the 38.2% retracement level of the 0.9056-to-1.4791 range, located around 1.2600. That said, a robust rebound from the 55-month EMA would help sustain the medium-term bullish outlook.

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