Canadian Dollar Price Outlook: USD/CAD Stalls Ahead of Key Support
Canadian Dollar, CAD, USD/CAD Price Analysis:
- USD/CAD has been range-bound for the past few weeks.
- The pair has stalled ahead of a test of key support, even as USD-weakness continues to show.
USD/CAD Stalls Ahead of 1.3500 Test
USD/CAD has pulled up just shy of a key zone of support around the 1.3500 handle, and this has happened even as the US Dollar has continued a bearish trend into the start of this week’s trade. In USD/CAD, the support zone around 1.3500 is not a new thing, as this came into play a couple of weeks ago after a quick show of support-turned-resistance earlier in the month. The past few weeks in particular have been very range-like, as the pair has now caught two different resistance inflections from around the 1.3675-1.3700 area to go along with those multiple support items off of the 1.3500 zone.
USD/CAD Four-Hour Price Chart
USD/CAD Bigger Picture – Can Bears Re-Take Control?
Taking a step back to the Daily chart, and the big question is whether USD/CAD bears can re-gain control of the pair. USD/CAD had a strong first two-and-a-half months of 2020, spiking from a low of below 1.3000 up to a high just below the 1.4700 handle. That high that was set in mid-May fell just 21 pips shy of a test of the 17-year-high; after which a pullback developed that soon turned into a range.
That range in USD/CAD ran for most of April and May, with sellers finally grabbing the wheel in late-May and into early-June; with the pair finally finding support at the confluent area around 1.3315. The same area that had helped to mark the March lows furnishes the 78.6% Fibonacci retracement of the 2020 move in the pair. This helped USD/CAD to recover a bit; but the pair soon moved into the range that holds into today’s backdrop after the Q3 and H2 2020 open.
USD/CAD Daily Price Chart
Chart prepared by James Stanley; USDCAD on Tradingview
--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
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