Canadian Dollar Highlights:
- USD/CAD turned off notable resistance
- More weakness looks to be ahead in light of rejection
USD/CAD turned off notable resistance
USD/CAD lost momentum heading into the early part of last week. You could see the pair getting tired as it showed its inability on several days to hold near the highs of the session. The rollover last week came from a thicket of resistance, mainly the Nov/Dec swing-high and January 2019 trend-line.
It was also an unsurprising event given the tight trading conditions we are seeing in FX, with volatility hovering around record lows. USD/CAD carved out its smallest range since 1996 last year, and while that is anticipated to change this year, we need to see a major level broken first.
As long as USD/CAD stays below 13382, then so does the potential for a breakout to develop to the upside. It will take a break below 12951 to get things rolling on the downside. Which brings us to more of the same that we saw all of last year – rangebound price action.
This favors seeing USD/CAD sink further before finding its footing. It could potentially find buyers sooner rather than later, but there aren’t any great price levels to work with. However, a trend-line, most visible on the 4-hr time-frame, rising up from early January could act us support around the 13200-line. A hold there could shift the focus back towards testing resistance again over 13300, while a break could accelerate the decline.
USD/CAD Daily Chart (turned off big resistance)
USD/CAD4-hr Chart (watch trend-line support)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
