Canadian Dollar Forecast: USD/CAD Eyeing a Rally off Consolidation Zone
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USD/CAD Price Outlook, Charts and Analysis
- Bank of Canada rate decision today and Canadian growth figures on Friday.
- USD/CAD pushing towards the higher end of the trading range.
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USD/CAD – Printing its Highest Price in Five Weeks
On May 22, USD/CAD pointed lower and printed its lowest level in four weeks. However, the price pulled back in the same day to the consolidation area and failed to close below the lower end of the trading range at 1.3377. Along side this development, the relative strength indicator (RSI) crossed above 50 indicating the start of an uptrend move.
A fresh push to the upside started in the following days towards the levels we mentioned in last week article 1.3457 and the price closed yesterday at 1.3492 – its highest closing price since April 24. Today, USD/CAD broke above the higher end of the trading range at 1.3516 and rebounded off the April 24 high at 1.3521.
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USD/CAD DAILY PRICE CHART (FEB 2109- MAy 29, 2019)
A closer look at USD/CAD daily chart shows hesitation from the buyers in pushing the price to print its highest level in nearly 6 months. If the pair today closes below 1.3516 this would keep the price within the same trading range (1.3377 – 1.3516). However, a close above 1.3505 would still be considered as a bullish close and suggests the buyers might repeat their attempt to break above 1.3516 and test again 1.3521. A further bullish close above 1.3516 could push the price towards 1.3548-50. Daily and weekly resistances at 1.3521 and 1.3536 are worth monitoring.
A close at or below 1.3494 would create a bearish Doji pattern . In this case the price could repeat the April 24 scenario, falling towards 1.3457 although the daily support at 1.3470 needs to be watched. USD/CAD might keep falling towards 1.3410 contingent on closing below 1.3457. Daily and weekly support levels at 61.8% Fibonacci retracement 1.3440 and 1.3425 need to be in focus.
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USD/CAD Two-HOUR PRICE CHART (May 22 – 29, 2019)
Looking at the USD/CAD two-hour chart, today the price rebounded at its highest level in nearly five weeks, therefore any break above 1.3522 threshold suggests the price might rally towards the weekly resistance mentioned above.
Close attention must to be paid to the 1.3481 level, so if the price breaks below it would swing lower towards 1.3457, support mentioned above needs to be considered. The price could rebound at 1.3481 creating a head and shoulders pattern, a potentially bearish set-up.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.