USD/CAD Cup and Handle: Bullish Breakout on the Horizon?

In today’s technical review, we focus on an interesting setup forming on the U.S. dollar against the Canadian dollar (USD/CAD). The chart reveals a rounded bottom pattern, often referred to as a cup and handle—a classic reversal structure in technical analysis.

At the moment, the market is shaping the “handle” portion of this pattern, highlighted in red. This stage typically involves some sideways movement or a modest pullback before a potential bullish breakout. For the setup to confirm itself, price action needs to break decisively above the upper green resistance line, which currently acts as the ceiling of the formation. A daily close above that area would generate a clear buy signal and pave the way for a longer-term uptrend.

Still, caution is advised. The bullish scenario would lose validity if the pair dropped below the blue horizontal support—the foundation of the handle. Although such a breakdown seems less probable right now, it remains a critical level to monitor closely.