The Canadian dollar has strengthened slightly against the US dollar recently and appears to be preparing for another significant move. USD/CAD began weakening around 14 March after it failed to break through resistance at CA$1.445 and fell to the uptrend at CA$1.428. USD/CAD is gearing up for a potential breakout as a symmetrical triangle nears completion.
The triangle has been gradually forming and could be approaching a breaking point over the next few days as the wedge closes. As measured by the relative strength index, momentum has turned decidedly negative, suggesting that USD/CAD could continue to decline. However, for that to happen, the pair may have to contend with the uptrend and support levels in place since the beginning of 2025 around CA$1.430.
The FX rate at CA$1.430 has been a key support and resistance level for some time, and a break below this level could set up a potential further decline to CA$1.415.
However, triangle patterns such as these can be tricky, and until confirmed, USD/CAD could just as quickly rise, leading to potential US dollar strength. Should USD/CAD break above the downtrend at CA$1.438, it could rally back to the upper end of the trading range at CA$1.445.
With the ongoing back-and-forth headlines surrounding the Trump trade wars and the looming 2 April tariff deadline, the currency could break in either direction.
Written by Michael J Kramer, founder of Mott Capital Management
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
The triangle has been gradually forming and could be approaching a breaking point over the next few days as the wedge closes. As measured by the relative strength index, momentum has turned decidedly negative, suggesting that USD/CAD could continue to decline. However, for that to happen, the pair may have to contend with the uptrend and support levels in place since the beginning of 2025 around CA$1.430.
The FX rate at CA$1.430 has been a key support and resistance level for some time, and a break below this level could set up a potential further decline to CA$1.415.
However, triangle patterns such as these can be tricky, and until confirmed, USD/CAD could just as quickly rise, leading to potential US dollar strength. Should USD/CAD break above the downtrend at CA$1.438, it could rally back to the upper end of the trading range at CA$1.445.
With the ongoing back-and-forth headlines surrounding the Trump trade wars and the looming 2 April tariff deadline, the currency could break in either direction.
Written by Michael J Kramer, founder of Mott Capital Management
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
Disclaimer
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.