USD/CAD Technical Analysis: Highest Levels Since 2004, Favoring Upside
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- USD/CAD Technical Strategy: 1.3310/50 Resistance Has Broken Confirming Bias Higher
- MACD turning bullish showing extension to 1.3400 is likely
- Monday’s higher close helps to confirm our bullish view and now acts as support
The Canadian Dollar broke out of its falling corrective channel rather aggressively taking it to the highest levels of 2015. USDCAD rebound higher along with other currency pairs that moved in favor of the USDOLLAR as Federal Reserve members signaled a rate hike was still in the works and that a global recession was a bigger risk to the US than US growth. Wednesday’s miss on Canadian retail sales also seems to help further the move.
MACD has turned bullish as USDCAD printed a new high for 2015. The short-term support will be the September 21st low followed by the Friday low of 1.3006. Additionally, the hold of 1.2950 appears to be instilling confidence of the longer-term uptrend. Resistance now turns past the August 26th high toward the psychologically key 1.3400 followed by 1.3476, which is the 61.8% Fibonacci retracement of the 2002-2007 downtrend.
The move to new highs for 2015 turns trading focus toward buying dips within the resumption of this uptrend. Daily extremes of 1.3230 and 1.3206, the September 18th and 17th highs respectively will be the first focus for a swing approach. Choosing a profit target when trading 11-year highs can be tricky so weekly pivots can be used and the Weekly 2nd Resistance level sits around 1.3440, which is an appropriate level for targets over the coming week.
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