This forex pair is back in sideways action and looks ready to form a new range with this looming test of support.
Will USD/CAD bounce again?
Check out these inflection points I’m watching on the 4-hour time frame.
USD/CAD 4-hour Forex Chart by TradingView
So much for USD/CAD breaking below that double top neckline!
Yet another strong NFP report lifted the U.S. dollar back above the near-term support at the 1.3400 handle and onto a test of the highs at the 1.3535 region.
However, market players seem to be adjusting their long USD bets ahead of a bunch of top-tier catalysts this week, including the U.S. CPI release and retail sales reports.
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 Loonie and Greenback, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/CAD just retreated back below the pivot point level (1.3470) and is now setting its sights on the range support at 1.3365, which is just above S1 (1.3340).
Sustained bearish momentum below this region could set off a downtrend that’s the same height as the rectangle pattern or roughly 170 pips.
On the other hand, if the floor holds again, USD/CAD might make its way back to the range resistance at R1 (1.3530) or even bust through for a rally to R2 (1.3600).
In any case, don’t forget to account for the average USD/CAD volatility of close to 65 pips when trading this pair.
Whichever bias you end up trading, make sure to use trading plans and to execute your best risk management skills!
