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Canadian Dollar Forecast: USD/CAD Scales Above 1.3200 on CAD Jobs

Canadian Dollar Forecast: USD/CAD Scales Above 1.3200 on CAD Jobs

2019-11-08 14:33:00
James Stanley, Currency Strategist
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Canadian Dollar Talking Points:

USD/CAD Breaks Out, Plays Catch Up to DXY

It’s so far been a big week for the US Dollar. While the US currency limped into last week’s close, holding support around two-month-lows, this week has seen a continuation of strength as that bearish trend has pulled back. In the USD, this has amounted to a fresh three-week-high, with the Greenback moving to and breaking-out from two different resistance zones looked at yesterday. In USD/CAD, however, that pullback had been muted as the same resistance that came into play after last week’s Bank of Canada and FOMC rate decisions held the highs through a couple of tests earlier this week.

This morning’s Canadian jobs report helped to bring some CAD-weakness into the mix, and USD/CAD is now pushing up to a fresh three-week-high.

USD/CAD Two-Hour Price Chart

usdcad usd/cad two hour price chart

Chart prepared by James Stanley; USDCAD on Tradingview

USD/CAD Heading to Range Resistance?

Given this push up to fresh three-week-highs, the next objective becomes trying to find that next area of resistance, and to do so taking a tops-down approach can be helpful. Drawing back to the Daily chart and noticing a similar support bounce as what played-in during July trade and the potential for a range begins to show.

When prices formed support just above the 1.3000 level in mid-July, buyers pushed all the way into a resistance zone lurking from 1.3361-1.3385. A recurrent test in early-October saw sellers come-in ahead of a test of that zone, but resistance forming a series of lower-highs around the 1.3348 area keeps this area of interest as potential range resistance in the longer-term theme.

USD/CAD Daily Price Chart

usdcad usd/cad daily price chart

Chart prepared by James Stanley; USDCAD on Tradingview

USD/CAD Shorter-Term Levels to Know

Given this morning’s short-term breakout as driven by Canadian data, and there are a few points of nearby interest for strategy. The 1.3240 area is now very nearby and previously gave a dose of resistance in mid-October just before sellers posed a plunge. This could be looked at as that next area of resistance on the chart that could allow for pullbacks; and for traders looking to work with a short-term theme of strength, higher-low support potential exists around prior resistance of 1.3200.

Around the 1.3300 level is another point of potential resistance as this price helped to carve-out highs in the month of September, and this could be a topside profit target for short-term bullish plays.

USD/CAD Four-Hour Price Chart

usdcad usd/cad four hour price chart

Chart prepared by James Stanley; USDCAD on Tradingview

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

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--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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