USD/CAD – Monthly Analysis
In November and the first half of December, the Canadian Dollar found unexpected strength, likely fueled by the Bank of Canada’s reluctance to cut rates. But is CAD still dancing at the ball—or is the clock nearing midnight? In this analysis, we examine the signals that will matter most as December 31 approaches and assess what to watch as the year closes.
CANDLES
USD/CAD
USD flipped the table on Friday, closing strongly bullish on both the daily and weekly frames. If momentum carries into next week and the weekly prints a solid green candle, this move is likely to mark a mid-term bottom.
The monthly currently appears bearish, but that would be a purely technical close, mainly signaling direction for January. The most important print by far is the annual close, which remains undecided. The annual candle is sitting precisely on the line between a completed and an incomplete Dark Cloud Cover. A close above 1.3811 would make the annual bullish; any close below that level would render it bearish. For those expecting CAD to strengthen, this week’s bullish bottom is clearly unhelpful. The annual close is shaping up to be both interesting and highly informative.
ELLIOTT WAVES
CAD/USD
Long term chart remains the same.
Wave 3 targets:
CAD/USD – 0.67 – 0.58
USD/CAD – 1.49 – 1.72
USD/CAD
This chart has been tracked since 2021 and remains practically unchanged.
Two main counts:
Blue (primary):
Wave 4 complete.
Next target: $1.68-1.80
Green:
The pair works on wave 5 of a Leading Diagonal
Next target: $1.50-1.75
Target by a 5-year flag: $1.73
SUMMARY:
The Canadian dollar (CAD) remains entrenched in a prolonged bearish trend. That said, the 2025 annual close still has the potential to alter the long-term stance, and the criteria for that shift are clearly defined.
While the short- and mid-term frames have been tracking bearish, a sharp reversal in a single week could nullify recent efforts to support the Loonie—including the Bank of Canada’s decision to hold rates while the Fed cut. Given the candlestick structure and the precise level that will matter on December 31, the importance of the final days of the year cannot be overstated. Patience is warranted.
Outlook so far: CAD remains weak against the USD. Despite calls for stabilization or recovery, the technical profile and prevailing trends continue to favor an extended bearish trajectory.
Happy Trading!
Dollar Index: DXY
https://investingangles.com/category/currencies/usd/
