Breakout or Fakeout? Loonie at a Critical Juncture

USDCAD is currently trading around 1.3836, after breaking above the key resistance level at 1.3825 earlier in the session. This breakout may have shifted momentum in favor of the bulls, but the pair now faces a new intraday fractal resistance at 1.3844, which it is currently testing. A clean break above this barrier could open the door for further upside toward the weekly fractal resistance at 1.3891.

The 1.3891 level remains pivotal, as it coincides with previous highs and represents a strong resistance zone. Should the market approach this area, price action will need to be monitored closely. A failure to break decisively higher could lead to the formation of a bearish Alt-Bat harmonic pattern, projected slightly above at 1.3912.

In the near term, the battle between 1.3844 intraday resistance and 1.3811 intraday support will be crucial for short-term positioning. A sustained move above 1.3844 would strengthen the case for a test of 1.3891, while a failure to hold above 1.3811 could trigger another pullback toward the weekly fractal support.

Safe Trades,
André Cardoso