Canadian vs US Dollar: USD/CAD Sideways Move Could End Below This Price
Canadian Dollar Forecast
Check our latest Q4 forecasts for free and learn what is likely to move the markets at this time of the year.
USD/CAD – Change of Course
Last week, USD/CAD buyers lost momentum before testing the Oct 3 high at 1.3348. Consequently, the price reversed direction then fell to 1.3171 – its lowest level in over five weeks. On Friday, the weekly candlestick closed with a 0.8% loss.
Alongside this, the Relative Strength Index (RSI) dropped below 50 level highlighting the end of buyer's domination.
Just getting started?See our Beginners’ Guide for FX traders
USD/CAD DAILY PRICE CHART (DEC 1, 2017 – OCT 15, 2019) Zoomed Out
USD/CAD DAILY PRICE CHART (May 27– Oct 15, 2019) Zoomed In
From the daily chart, we notice on Friday USD/CAD declined to lower trading zone 1.3166 – 1.3256. On Monday, the pair recovered some of the losses however, remained trading below 50 -Day average.
Thus, a close below the low end of the zone, could increase the likelihood of ending current sideways move and press USDCAD towards 1.3064. Although, the neckline of the double top pattern discussed in our last update located at 1.3134 in addion to the weekly support area and level marked on the chart (zoomed in) should be considered.
That said, a close above the high end of the zone could mean a continuation of the sideways move and send USDCAD towards 1.3357. Nevertheless, the daily resistance levels at 1.3317 and the Oct 3 high at 1.3348 would be worth monitoring.
Having trouble with your trading strategy? Here’s the #1 Mistake That Traders Make
USD/CAD four hour PRICE CHART (AUG 29 – Oct 15, 2019)
Looking at the four- hour chart, we notice on Thursday USD/CAD rebounded from 1.3346. In the following day, the price fell sharply and broke below the Oct 2 low at 1.3206.
Hence, a break below 1.3185 could see USDCAD trading even lower towards 1.3134. Nevertheless, the low end of the aforementioned trading zone should be watched closely. On the other hand, a break above 1.3280 could push USDCAD towards 1.3317. However, the weekly resistance level underlined on the chart should be kept in focus.
See the chart to know more about key levels to monitor in a further bullish/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.