USDCAD Bearish Outlook as Wave 4 Correction Completes

USDCAD remains under bearish pressure after a three-wave corrective rally into resistance, with technicals suggesting another decline toward channel support as stronger crude oil prices support the Canadian dollar.

USDCAD remains bearish despite the recent corrective rally, which appears to have unfolded in a clear three-wave structure. This move is viewed as wave 4 within a broader bearish sequence that has been in play since December.

The rally stalled precisely around the 1.3750 resistance area, where price met the upper boundary of the descending channel. This technical reaction strengthens the view that the broader structure still favors the downside and that the decline from December is forming an ongoing motive wave pattern.

From an Elliott Wave perspective, the market may now be preparing for wave 5, which could push the pair to new lows in the weeks ahead and potentially complete a diagonal structure. In the near term, the next key level to watch is the lower side of the channel around 1.3550, which price is currently attempting to break.

On the fundamental side, the Canadian dollar has recently gained strength thanks to higher crude oil prices. As Canada is one of the world’s major crude oil exporters with significant reserves, rising oil prices tend to support the Canadian dollar and can add additional downside pressure on USDCAD.

If bearish momentum continues, a break below channel support could confirm that wave 5 is underway and open the door for further weakness in the pair.