USD/CAD Technical Analysis: Key Breakdown Keeps Focus Lower
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- USD/CAD Technical Strategy: Looking To Sell Rallies
- 55-DMA And Prior Channel Support May Provide Near-Term Resistance
- Only A Daily Close > 1.32664 Would Invalidate Bias Lower
USD/CAD will likely be a show stealer in the G10 FX space on November 6th. The October payroll reports out of the United States,and Canada is nearly guaranteed to bring volatility. Technically speaking, USD/CAD has been consolidating between 1.3100/1.3200 and a break and close on the other side of either level could be the first indication of a strong move for the rest of November.
Like many other currency pairs, USD/CAD has been subject to the red-hot US DOLLAR. Traders small and large have been loading up on the US dollar in anticipation of a positive U.S. payroll number on Friday that could cement a rate hike on December 16th, by the Federal Reserve. However, regardless of the fundamental news, the technical level of 1.32664 the closing high of October will appropriately be in focus. A weekly close above 1.32664 could make the argument that multiyear highs are once again on the horizon. Until such a break happens, the recent breakdown towards 1.2831, which seemingly found support from the March 18th high when the Fed tempered optimism for an imminent rate hike.
Reliable short-term resistance and overall USD/CAD direction havebeen found with the 55-day moving average. Currently resting at 1.3173, the 55-dma can act as a direction filter for trading USD/CAD. Going into NFP Friday, price action and close in regards to the 55-DMA and October closing high of 1.32664 will be the tell for USD/CAD. If price remains below both levels, the downside will remain favored toward an eventual retest of 1.28311.
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