USD/CAD Price: USD May Fall against Canadian and This is Why
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USD/CAD Price Outlook
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USD/CAD – Limited Gains
Last week USD/CAD rallied to its highest levels in seven weeks at 1.3345. However, the pair slipped back and closed on Friday with 0.1% gain, and with a bearish Doji pattern indicating to buyer’s indecision with a possible reversal in the horizon.
Alongside this, the Relative Strength Index (RSI) U-turned before reaching 70 and fell to 56 then remained flat after, reflecting the buyer’s loss of momentum.
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USD/CAD DAILY PRICE CHART (April 1, 2017 – AUG 13, 2019) Zoomed Out
USD/CAD DAILY PRICE CHART (May 28 – AUG 13, 2019) Zoomed In
Looking at the daily chart, we notice on Monday USDCAD opened with a downside gap however the price closed it and rallied after. Today, the pair continued its rally eyeing a move to the higher trading zone 1.3284 – 1.3357.
Therefore, a close above the low end of this zone could send the price towards the high end. However, the weekly resistance levels marked on the chart should be watched closely. Further close above the high end could send the price towards 1.3459. The weekly resistance levels underlined on the chart need to be kept in focus.
On the other hand, the any failure in closing below the low end of the zone could press the price lower towards 1.3166.
It’s worth noting the importance of the August 5 low at 1.3177. Any rebound from this level would convert it into the neck line role of a head and shoulders pattern. This pattern if completed may see USDCAD make a re-test of the monthly low at 1.3016. Zones and weekly support levels highlighted on the chart should to be watched along the way.
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USD/CAD Four-HOUR PRICE CHART (JUly 15 – AUg 13, 2019)
Looking at the four-hour chart, we notice on Friday USDCAD rebounded nearby Fibonacci retracement 61.8% at 1.3273 then slipped back to test 1.3200 handle as expected in our last update: Uptrend Move Fades
Buyers need to overcome the level they failed at last week i.e. clear Fib 61.8% to continue rallying the price. Thus, a break above 1.3309 may push the pair towards 1.3357. Although, the weekly resistance level underlined on the chart needs to be considered. See the chart to know more about the following resistance levels buyer would encounter in a further bullish move.
On the flip-side, a break below Fibonacci retracement 50% at 1.3224 could press the price towards the August 5 low at 1.3177. However, the daily support level underscored on the chart should be monitored. See the chart to find out the following support levels sellers would face in a further bearish move.
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.