The USDCAD has some great technicals going for it, both on the daily and weekly time frames.
Starting with the weekly chart, the pair has traded between 1.20 and 1.46 for the last six years. That gives us a textbook equidistant channel as illustrated below.
The chart above offers some “big picture” structure to the USDCAD chart.
However, it doesn’t offer any immediate action considering each wave within this channel has taken months if not years to play out.
For a more short-term setup, we have to drill down to the daily time frame.
Now, we know the USDCAD is coming off of that multi-year channel support via the chart above. But the big question now is, does the uptrend continue, or do we get a rotation lower?
That’s where the 1.295 horizontal resistance and the ascending trend line near 1.255 come into play.
While there isn’t much to do now, a daily close above 1.295 would confirm the continuation of the recent uptrend and open the door to 1.34 for a move of approximately 440 pips.
Alternatively, a daily close below the June 2021 trend line near 1.255 would expose the multi-year channel support at 1.20.
Either way, we’re looking at a potential 400-500 move coming from the USDCAD. All that’s needed right now is a touch of patience to wait for a confirmed breakout one way or the other.