USD/CAD – Not Out of the Woods Yet
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- Stalls at key trendline
- Price action over next few days should prove pivotal
USD/CAD - Not Out of the Woods Yet
It has been a wild year so far in USD/CAD. The exchange rate was up more than 6% at one point in January and finished the 1st quarter down almost 7%. Interestingly the rate put in a low on the last day of the quarter from about 4 pips below last year’s Q4 low day close and has risen steadily higher since. It is still too early to tell if this is the start of a more serious advance or just a minor correction before heading lower again, but I am inclined to think it could easily turn into something more on the upside.
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Yesterday’s 1.3218 high looks like a pretty natural upside pivot as it coincides with a trendline connecting the late January and February highs. Traction above there should pave the way for a more pronounced move higher. If we do move higher, I will also be keeping a close eye on the mid-march high around 1.3300 as a move above would trigger a multi-week basing pattern. Failure to gain traction above 1.3218 over the next few sessions would confirm that the medium-term downtrend remains firmly in place.
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--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.