USD/CAD Nears Yearly Highs as Canadian Dollar Rally Continues

The Canadian dollar has seen a significant rally in recent weeks, gaining more than 3.5% from its August low and posting four consecutive weekly advances. The USD/CAD pair is now approaching its yearly highs, with bulls firmly in control but facing stiff resistance at key levels.

Weekly momentum is nearing its strongest levels since early July, while the daily RSI warns of an increasingly stretched advance. However, the broader technical structure remains constructive, and buyers need a confirmed breakout above the yearly highs to fuel the next major leg of the rally.

The upcoming U.S. Non-Farm Payrolls report on Friday will be crucial in shaping the next phase of the advance, with softer inflation shifting Fed expectations towards a potential hold next month. A firm employment report could revive the October hike outlook and underpin USD/CAD, while a softer release would reinforce expectations for a near-term hold.