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Canadian Dollar Price Forecast - USD/CAD Sliding Towards Short-Term Support

Canadian Dollar Price Forecast - USD/CAD Sliding Towards Short-Term Support

Nick Cawley, Strategist

Canadian Dollar (CAD) Price, Chart and Analysis

  • USD/CAD sell-off nears recent support zone.
  • US Dollar likely to be steered by important data prints.

USD/CAD Drifts into Confluence Support

The Canadian Dollar gained in value against the US Dollar this week after touching a four-month high on Monday. The USD/CAD sell-off comes despite the ongoing strength in the greenback and is more of a reflection of an uptick in the price of oil over the last 5 days. The chart below shows that there has been a sell-off reaction on three prior occasions when USD/CAD hits the 1.3320 – 1.3380 zone and this week’s move may continue that pattern, especially if the oil market strengthens further.

Later in today’s session, a couple of important US data prints, with retail sales released at 13:30 GMT and the provisional University of Michigan sentiment out at 15:00 GMT. Both have the ability to move the US currency.

The daily USD/CAD chart shows a near-term support zone close by between 1.3232 and 1.3236 with the 20-day moving average marginally higher at 1.3242. This is the first time the 20-dma has been tested since January 22. Below here, the 200-dma currently sits at 1.3188. There are a few recent highs on the way back up to 1.3300 which may be difficult to overcome unless the US data drives the greenback higher.

USD/CAD Daily Price Chart (July 2019 - February 14, 2020)

canadian dollar against the us dollar

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on the Canadian Dollar (CAD) – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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