USD/CAD is Lowkey Struggling: Trendline Resistance is Giving Major Bearish Energy at 1.3630
USD/CAD is having trouble holding onto gains in the European session and is trading around 1.3576.
Quick overview
- USD/CAD is struggling to maintain gains around 1.3576, with technical signals favoring sellers.
- Key resistance is at 1.3633, where sellers are actively defending against upward movement.
- The Canadian Dollar is benefiting from rising oil prices and mixed US labor data, which suggests a slowing job market.
- Traders are advised to consider short positions near the 1.3630 resistance, with profit targets set at 1.3490 and 1.3434.
USD/CAD is having trouble holding onto gains in the European session and is trading around 1.3576. Although the pair has stopped its recent decline and found some support, the recovery is still weak.
Overall, technical signals still favor sellers. The US Dollar is under pressure because of updated labor data and changing expectations for the Federal Reserve.
Technical Outlook: Sellers Defend the 1.3630 Resistance
On the 4-hour chart, USD/CAD is bouncing off key support at 1.3490 but is still stuck below a major downward trendline that started from the January highs near 1.3900.
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Resistance Levels: The main barrier is at 1.3633, which matches the falling trendline and a previous breakdown area. Recent 4-hour candles with long upper wicks near 1.3600 to 1.3630 show that sellers are strongly defending this zone.
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Moving Averages: The 50-EMA at 1.3654 and the 200-EMA at 1.3714 are both trending down, which supports the bearish outlook and acts as resistance if the price tries to rally.
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Support Zones: The first support is at 1.3551. If the price falls below the 1.3490 area, it could drop to 1.3434 and speed up the downtrend.
Macro Analysis: US Labor Data vs. Crude Oil Strength
The Canadian Dollar, or “Loonie,” is gaining from mixed economic signals in North America. The US Dollar steadied a bit after the delayed January Nonfarm Payrolls report showed 130,000 new jobs, but overall sentiment is still cautious.
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US Labor Market Revisions: Even though January’s numbers were better than expected, big downward changes to November and December data make traders think the US job market is slowing more quickly. This could lead to the Federal Reserve easing policy later in 2026.
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Higher Oil Prices Support CAD: West Texas Intermediate (WTI) crude oil is approaching $65.00 per barrel today. Rising tensions in the Middle East are keeping energy prices up, which directly supports the Canadian Dollar.
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Bank of Canada (BoC) Neutrality: The BoC kept its policy rate at 2.25% in January. Governor Tiff Macklem said the bank is taking a “neutral” approach, noting that the economy is holding up but trade policy uncertainty means they are waiting to see what happens next.
Market Sentiment: A Corrective Bounce, Not a Reversal
Current price action shows that the move from 1.3490 to 1.3576 is probably just a short-term bounce, not a full trend reversal. Since the price hasn’t broken above 1.3633, the most likely direction is still down as long as the trendline stays in place.
Market Insight: “The Canadian Dollar’s strength is a byproduct of high oil prices and a narrowing interest rate differential,” says one market strategist. “Unless USD/CAD can clear the 50-EMA at 1.3654, the bearish structure remains fully intact.”
Trade Idea: USD/CAD Strategy
Traders could look at short positions near the 1.3630 trendline resistance. Stops should be set above 1.3720, close to the 200-EMA, to guard against a trend change. The first profit target is 1.3490, with a second target at 1.3434.
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