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Key Takeaways:
- Major US economic news (CPI, PPI, Retail Sales) will drive this week's market volatility.
- The higher weekly chart shows strong support holding firmly at the 1.36000 level.
- Daily timeframes reveal immediate bearish momentum hitting a vital support zone.
- Traders should closely watch for a bullish break and retest of the 1.36990 – 1.36820 area.
What Red Folder Events Drive USD/CAD Price Action This Week?
Big economic news drives massive market direction. If you want to trade safely, you must pay close attention to the fundamental data coming out of the United States.
Here are the high-impact events driving directional conviction:
- Tuesday – US CPI & Core CPI (8:30 PM)
- Wednesday – US PPI & Core PPI (8:30 PM)
- Thursday – US Retail Sales & Core Retail Sales (8:30 PM)
These red-folder events continue to dictate short-term volatility and directional conviction.
What is the USD/CAD Price Action Analysis on the Higher Timeframe?
Weekly Chart
On the weekly timeframe, USD/CAD remains bullish, but price is holding strong weekly support around 1.36000. Buyers are defending this level, suggesting massive rally to the upside
Weekly Chart Observations:
- Weekly trend remains bullish overall
- Price is holding strong support around 1.36000
- Buyers are actively defending this respected weekly level
- Potential for massive rally to the upside based on the previous reaction of the exact level
What Is the Daily Chart Signaling Before the Next Big Move?
On USD/CAD daily timeframe, the market is still in a clear bearish trend. Price is currently reacting at a key daily and weekly support zone, where consolidation may happen before the next big move.
Daily Chart Observations:
- The market remains bearish, with sellers still in control
- Price is sitting at a strong daily and weekly support area
- Consolidation may happen around this zone
- The breakdown above daily resistance could potentially push upside
- The breakdown below support could continue the bearish move
- Waiting for confirmation and momentum is important before taking both buying and selling opportunities
What Is the Best Way to Approach this Setup?
Maximizing the classic break and retest pattern significantly increases your probability of landing successful continuation trades. Tracking live USD/CAD price action works incredibly well during tight consolidation breakouts. Momentum eventually builds up enough power to fuel a truly sustained directional move.
Bullish Break & Retest Scenario
Maximizing the break and retest pattern significantly increases the probability of continuation trades, especially during consolidation breakouts where momentum is building for a sustained move to the upside.
USD/CAD maintains a bullish bias if:
- Price breaks and successfully retests the daily resistance zone at 1.36990 – 1.36820
- Strong bullish rejection forms after the retest, confirming buyer control
- Momentum continues to hold above the breakout structure
Trade Idea:
- Break and retest daily resistance level (1.36990 – 1.36820)
- Target Price 1.38000
- Stop loss placed below the daily resistance level (potentially act as new support)
Note: This trade is considered a higher-probability setup since it aligns with the overall trend.
Bearish Break & Retest Scenario
Effectively utilizing the break and retest pattern can significantly improve the probability of continuation trades, particularly during consolidation breakouts where building momentum supports a sustained move to the downside.
USD/CAD maintains a bears bias if:
- Price breaks and successfully retests the daily resistance zone (1.36990 – 1.36820)
- Strong bearish rejection forms after the retest, confirming sellers’ control
- Momentum continues to hold above the breakout structure
Trade Idea:
- Break and retest weekly support level (1.36990 – 1.36820)
- Target Price 1.35000
- Stop loss placed above the weekly support level (potentially act as new resistance)
Note: High-risk trade is less favorable, could get you a low probability trade and tighter risk reward ratio
Final Thoughts
Right now, USD/CAD is sitting at a very important area, and with major US news coming this week, volatility can increase very quickly. As traders, our job is not to force trades or guess the next move too early. Our job is to stay patient, wait for confirmation, and let the market reveal its direction first.
Sometimes the best trade is simply waiting for the clean setup to appear.
Stay disciplined, protect your capital, and focus on quality over quantity. One good trade executed with patience is always better than multiple emotional trades.
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Disclaimer:
Trading forex and derivative instruments involves substantial risk and may not be suitable for all individuals. Only use funds that you are prepared to lose. It is important to understand how these markets work and the risks involved before trading, and to seek independent financial advice if needed. All market analysis and insights shared are intended for educational and informational purposes only and should not be considered financial or investment advice. May 8, 2026
