USD/CAD turned lower from a Pivot Point level and is now set to retest a key support zone.
Will the pair bounce from the level?
Or will we see a downside breakout in the 4-hour time frame?
USD/CAD 4-hour Forex Chart by TradingView
I don’t know if you’ve noticed but USD/CAD has been rejected from the 1.3525 – 1.3550 area not once, but TWICE in the last few days.
Interest rate speculations for the Fed and rising crude oil prices may have put a lid on CAD/JPY’s gains. But how low can CAD/JPY go before it attracts consistent buyers?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Canadian and the U.S. dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
We’re looking at the 1.3450 psychological level that also marks the Pivot Point line in the 4-hour time frame.
As you can see, the potential support one has pretty strong odds of drawing in more bulls since it’s also near an ascending channel support AND is juuust above a bullish crossover on the chart.
A bounce supported by bullish candlesticks and signs of momentum could put a trip back to the 1.3525 – 1.3550 previous highs on the table for the bulls.
However, the pro-CAD, anti-USD theme is real for some FX traders. If USD/CAD’s bearish downswing retains its momentum, then it could bust our support zone and head for December’s lows.
A bearish breakout with a fundamental boost could take USD/CAD to the 1.3400 psychological level if not the S1 (1.3360) Pivot Point zone near January’s lows.
Whichever direction you end up trading, make sure to follow your own trading plan when you trade your setups!