Canadian Dollar Weekly Forecast: USD/CAD Reverses Lower, What’s Next?
USD/CAD Price Technical Outlook
USD/CAD – Weaker Bullish Momentum
On Feb 10, USD/CAD rallied to its highest price in four months at 1.3329. However, the market retreated last week as some bulls seemed to cut back. This week, the pair rebounded from 1.3225 – its lowest level nearly three weeks.
Alongside that, the Relative Strength Index (RSI) slipped from 71 to 57 pointing out that uptrend move were losing momentum.
USD/CAD DAILY PRICE CHART (Nov 25, 2017 – FEB 18, 2020) Zoomed Out
USD/CAD DAILY PRICE CHART (SEp 24 - FEB 18, 2020) Zoomed In
From the daily chart, we noticed that exhausted uptrend move led some bulls to exit the market. This caused USD/CAD to decline on Feb 12 to a lower trading zone 1.3220 – 1.3291.
A close below the low end of the zone could lead more bulls to pull out of the market opening the door for the price to fall towards 1.3104. Further close below this level may encourage USDCAD bears to press towards 1.3015. Yet, the weekly support level marked on the chart (zoomed in) should be considered as some traders may exit/join the market around these points.
In turn, a close above the high end of the zone reflects a possible comeback from USDCAD bulls. In that scenario, they could push towards 1.3382. That said, the daily and weekly resistance level underscored on the chart would be worth monitoring.
USD/CAD four hour PRICE CHART (Jan 15 – FEB 18, 2020)
Looking at the four- hour chart, we notice that on Feb 3 USD/CAD carved out a high then a higher high on Feb 10 meanwhile RSI created a high with a lower high signaling a possible reversal. Later, the price pointed lower and corrected its uptrend move.
A break below 1.3212 could send USDCAD towards 1.3160. Yet, the weekly support level underlined on the chart should be watched closely. On the other hand, a break above 1.3335 might cause a rally towards 1.3378. Although, the weekly resistance printed on the chart should remain in focus.
See the chart to figure out more about key levels to monitor in a further bullish 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.