Canadian Dollar Short-term Outlook: USD/CAD Retests Pivotal Resistance
Author: Michael Boutros, Sr. Technical Strategist
Date: February 24, 2026
Summary
The USD/CAD currency pair has recently rallied back into a significant resistance zone, specifically near the monthly high. This area is crucial as it may determine the future direction of the pair—whether the rally will continue or reverse. The analysis indicates that the price is currently trading within a multi-week ascending pitchfork structure, which suggests that the advance is vulnerable while it remains capped beneath the upper boundary of this structure.
Technical Analysis
As of the latest observations, USD/CAD has erased its recent pullback and is once again testing a confluence resistance zone around 1.3722/33. This zone is defined by several technical factors, including the September and August swing lows, the objective yearly open, and the 38.2% retracement of the November decline. The immediate focus is on how the price reacts at this pivotal level as the month closes.
USD/CAD Daily Chart
In the previous outlook, it was noted that for the price to continue higher, it needed to maintain losses above 1.3566, with a close above 1.3733 required to support the next major leg of the advance. The recent rally has seen a 1.8% increase from the January low, reaching an intraday high of 1.3725 before facing exhaustion. The subsequent decline of 1.6% has now been fully retraced, placing the price back at the critical resistance level.
Key Levels
Resistance levels to watch include:
- 1.3722/33 (key resistance)
- 1.3759
- 1.3811
Support levels include:
- 1.3680
- 1.3617
- 1.3575/76 (key support)
Outlook
The USD/CAD is currently at a critical juncture, testing resistance at the monthly range highs. A confirmed move above this resistance could indicate a broader recovery phase, while failure to maintain gains could lead to renewed downside pressure. The upcoming release of US Producer Price Index (PPI) and Canada’s Q4 GDP data on Friday adds to the event risk, making it essential for traders to remain vigilant as the month closes.
USD/CAD 240min Chart
Conclusion
In summary, the USD/CAD is at a pivotal resistance level, and the market's reaction here will be crucial for determining the next directional move. Traders should keep an eye on the key support and resistance levels outlined above and be prepared for potential volatility as economic data is released.