USD/CAD price outlook remains bullish as U.S. dollar stays firm
USD/CAD exchange rate chart depicting recent bullish trend
The USD/CAD pair maintains a neutral intraday bias as it consolidates below its recent peak of 1.4194. Market analysts indicate that the broader outlook remains bullish as long as the 1.4009 support level holds. A break above 1.4194 would likely resume the larger uptrend, targeting the 1.4391 projection level.
However, traders should be cautious of a potential bearish divergence condition observed in the 4-hour MACD. A decisive break below the 1.4009 support could signal short-term topping, shifting the bias downward toward the 55-day exponential moving average (EMA) at 1.3925.
Global rate cuts fuel U.S. dollar rally
USD/CAD chart (June 2024 - December 2024) Source: Trading View
The U.S. dollar remains well-supported this December as several major trading partners implement aggressive monetary easing measures. The Bank of Canada has enacted consecutive 50-basis-point rate cuts, while European central banks are expected to announce similar rate reductions soon. These policy moves have bolstered the U.S. dollar against its peers, contributing to USD/CAD’s continued bullish momentum.
Looking at the broader technical picture, the uptrend from the 2021 low of 1.2005 remains intact. If the pair breaks through 1.4194, it could advance toward the 61.8% Fibonacci projection level at 1.4391. The medium-term outlook stays positive as long as support at 1.3418 holds, even in the event of a deeper pullback.
Traders should monitor upcoming economic indicators and central bank policy decisions that could influence market sentiment.
In our earlier analysis, we highlighted USD/CAD's sustained bullish momentum driven by U.S. dollar strength and global rate cuts, factors that continue shaping its upward trajectory.
