Post #15243

Loonie on the Ropes USD/CAD traded perfectly into the 50% retracement level we highlighted last week at 1.3905, before bouncing hard to the upside. Since then, momentum has been firmly bullish — driven by both technical follow-through and the growing fundamental divergence between Canada and the U.S. The loonie remains under pressure as weak Canadian growth data and dovish sentiment around the Bank of Canada keep investors cautious. Meanwhile, the U.S. dollar is holding strong after Powell’s “December cut not assured” remarks reignited rate-differential support. Canada’s GDP contraction and fading demand have only added to CAD weakness, making the USD a clear beneficiary in the short term. If USD/CAD manages to break cleanly above resistance, the pair could continue trending toward fresh 2024 highs as rate divergence deepens. However, if traders begin taking profit near current levels, we could see a modest retracement — a potential reset before another leg higher.