Dollar traders gather!
The USD/CAD pair’s upside is capping around a key technical resistance area.
Will the pair maintain its range pattern? Or will we witness a breakthrough?
USD/CAD Forex 4 Hours Chart by TradingView
In case you missed it, the US dollar rose a few points against its counterparts as traders tempered their Fed rate cut speculation following Friday’s US NFP report and ahead of this week’s FOMC minutes and US CPI and PPI releases.
Meanwhile, the Canadian dollar lost a few points against its safe-haven counterparts, while traders are concerned about tensions in the Middle East and a less-than-cautious Fed outlook.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on the US and Canadian dollars yet, it’s time to check the economic calendar and stay up to date with daily fundamental news!
USD/CAD, which has been trading in an uptrend since late September, is showing long wicks around the 1.3650 level. Coincidentally, the psychological level lines up with the resistance seen in September and the R1 pivot point line (1.3618) in the 4-hour time frame.
Can USD/CAD bears hold the fort at the range resistance area?
Watch out for more bearish wicks and candles, which could attract selling pressure and start a downtrend that could take USD/CAD to the 1.3550 pivot point and medium term levels.
If it turns out that USD/CAD is taking a breather, the pair could be on track for further gains. Watch for new October highs and continued trading above the 1.3650 area opening up a potential move to the 1.3700 psychological handle or the previous 1.3750 area of interest.
Whichever direction you end up trading, don’t forget to practice proper risk management and stay aware of top-notch market triggers when trading this. good luck!