USD/CAD Technical Forecast:
- US dollars / Canadian dollars The week starts off on a positive note, though the gains are limited
- Despite the weak price action on Monday, the technical signals continue to improve U.S. dollar
- This article discusses the main technical levels worth watching American dollar/bastard in the coming days
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The US dollar strengthened against the Canadian dollar on Monday, but its advance was limited in a session devoid of major catalysts, with the pair moving between small gains and losses for much of the day, before settling slightly higher with the close in New York. When all was said and done, USD/CAD rose 0.05% to 1.3540, up for the last six of the previous seven, in a sign that buyers may have regained the upper hand in the forex space.
Despite the weak moves at the start of the week, the technical signs have turned more positive for USD/CAD, especially since the beginning of this month when the bulls succeeded in defending the trend line support at 1.3300, an event that triggered a strong rally. The trading bias has improved further in recent days after the exchange rate regained its 200-day simple moving average and moved above a major in-play 10-month upward trend line.
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With bullish inertia on its part, USD/CAD could extend its recovery in the coming days and challenge the resistance at 1.3570/1.3580, an area where the 50-day SMA converges with the 50% Fibonacci retracement of the March/April decline. The pair may struggle to breach this barrier, but if the breach materializes, it may be followed by a rally towards trend line resistance at 1.3650.
On the other hand, if the sellers come back and trigger a pullback, the initial support extends from 1.3515 to 1.3485. A decisive break below this floor could encourage bears to launch an attack on the 200-day simple moving average, located just above the psychological level of 1.3400. In the event of further weakness, attention will turn south towards this year’s low at 1.3302.
|
change in |
Longs |
Shorts |
Hey |
| Daily | 3% | 17% | 12% |
| weekly | -36% | 85% | 12% |