USD/CAD Price Forecast: Canadian Dollar vs USD- A Rally or Consolidation?
Canadian Dollar Outlook
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USD/CAD – A Bullish U-Turn
On Nov 5, USD/CAD declined to 1.3154. However, the price rallied and recovered all the day’s losses, reflecting seller’s exit of the market. This marked a bullish shift and opened the way for buyers to take the lead after.
Alongside this, the Relative Strength Index (RSI) crossed and remained above 50, highlighting the end of downtrend move with a possible start of uptrend momentum.
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USD/CAD DAILY PRICE CHART (AUg 15, 2017 – Nov 12, 2019) Zoomed Out
USD/CAD DAILY PRICE CHART (June 18– Nov 12, 2019) Zoomed In
From the daily chart, we notice on Nov 6 USD/CAD rallied to a higher trading zone 1.3166 – 1.3256. On the following day, the pair tested trading below this zone although, the daily candlestick closed above its low end, indicating to more hesitation from the sellers to lead the price. Consequently, buyers took advantage and pushed the price above 50-day average eyeing a test of the high end of the zone.
Thus, a close above 1.3264 may send USDCAD towards 1.3357, contingent on clearing the weekly resistance level and area marked on the chart (Zoomed in) and the downtrend line originated the from the June 18 high at 1.3432.
On the flip side, a close below the high end could keep USDCAD in the range, i.e. pull the price back for a test of the low end of the zone. Further close below the low end embolden sellers to press towards 1.3064. That said, the daily and weekly support levels underscored on the chart should be watched closely.
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USD/CAD four hour PRICE CHART (Sep 24 – Nov 12, 2019)
Looking at the four- hour chart, we notice on Oct USD/CAD corrected higher and created a higher high at 1.3208. On Friday, the pair broke above this high and started uptrend move.
Hence, a break above 1.3280 could continue bullish price action towards 1.3318. Although, the weekly resistance level underlined on the chart should be considered. On the other hand, a break below 1.3225 may pause uptrend move and send USDCAD towards 1.3185. However, sellers need to keep an eye on the daily support level underscored on the chart.
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.