Canadian Dollar Forecast: USD/CAD Range in Need of Breaking
- USD/CAD rangebound, for now
- Top and bottom-side levels to watch for a breakout
USD/CAD rangebound, for now
The Canadian dollar has been a relative snooze-fest lately with it heading nowhere fast, but like all ranges it won’t last forever and will eventually lead to a breakout. The confinement in USD/CAD could soon further the trend lower off the March high or try to reverse course to the top-side.
There is solid support at this time in the immediate area surrounding 13500 with several small lows in recent weeks developing around the 200-day MA. This is making for a floor, that if broken, should lead to some decent momentum toward the June low around 13300, perhaps beyond should sellers show up in earnest.
On the flip-side, if support can continue to hold and the upper parallel off the March high (currently testing it) then a rally may form. But to confirm the break higher, a crossing of the top of the month-long range will be needed by breaching 13715.
This would likely lead to an important test of 13850, several lows created during April/May, before possibly turning lower again, or reasserting itself further towards 14000 should that threshold be crossed.
All-in-all, USD/CAD will be stuck in a range until its not, so traders need to be careful not to churn themselves if looking for a directional move. If anticipating an extended range, then looking to fade the perimeters of the range may prove a prudent strategy until we see a breakout.
USD/CAD Daily Chart (watch for a range-break)
Resources for Forex Traders
Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX