The Canadian Dollar has remained rather resilient in the face of US Dollar strength this week with USD/CAD holding below a key technical resistance confluence we’ve been tracking for months now. Here are the updated targets and invalidation levels that matter on the USD/CAD charts into the start of November trade.

USD/CAD DAILY PRICE CHART

Technical Outlook: Earlier this month we noted that USD/CAD was approaching a critical weekly resistance range at 1.3130/55 – “a region defined by the yearly high-week reversal close, the 61.8% retracement of the June decline and parallel resistance.” This threshold has continued to cap advances for the past four days with major event risk on tap into the close of the week. A breach/close above is needed to keep the long bias viable heading into the start of November trade with such a scenario targeting the 100% extension at 1.3206 backed channel resistance / 78.6% retracement at 1.3257.

USD/CAD 240MIN PRICE CHART

Notes: A closer look at price action sees USD/CAD still trading within the confines of the ascending pitchfork formation we’ve been tracking since last week. Note that the median-line converges on the 1.3130/55 resistance zone into the close of the month and further highlights the technical significance of this key region. Interim support rests with the trendline confluence just lower at 1.31 with a break below 1.3067/76 needed to suggest that a near-term high is in place- weakness beyond this region exposes 1.3015and the 50% retracement at 1.2971. Broader bullish invalidation rest at ~1.2926 where the 200-day moving average converges on the 61.8% retracement of the October range.

Bottom line: Heading into the November open the focus remains on a reaction off key resistance here at 1.3130/55 with the weekly opening-range taking shape just below- watch the break for guidance with the broader long-bias sub-1.3155. From a trading standpoint, I’ll favor fading weakness near-term while below this level with a break below this formation needed to fuel a larger correction in price. Keep in mind we get the release of Canada Employment figures & US Non-Farm Payrolls (NFP) on Friday – expect volatility into the close of the week.