USD/CAD: Eyes on Breakout Levels – Canadian Dollar Price Outlook
USD/CAD Price Technical Forecast
USD/CAD – Hesitant Bulls
On Feb 10, uptrend move led US Dollar against Canadian Dollar to 1.3329 - its highest level in four months. The market retreated after, as some bulls seemed to cut back. On Friday, USD/CAD declined further as some bulls showed more sway, then closed the weekly candlestick with a Doji pattern highlighting the market indecision at this stage.
Alongside that, the Relative Strength Index (RSI) bounced twice from 50 highlighting that uptrend momentum was still intact.
USD/CAD DAILY PRICE CHART (May 1, 2018 – FEB 25, 2020) Zoomed Out
USD/CAD DAILY PRICE CHART (SEp 24 - FEB 25, 2020) Zoomed In
From the daily chart, we noticed since Feb 12 USD/CAD reversed lower then stuck in the same trading zone1.3226 – 1.3291. Last week, the price failed in multiple occasions to retreat to a lower zone, highlighting that bulls were not done yet. On the other hand, the pair failed yesterday to move to a higher trading zone.
A close above the high end of the zone may encourage USDCAD bulls to push towards 1.3382. Further close above this level opens the door for more bullishness towards 1.3419. Yet, the weekly resistance areas underscored on the chart should be considered.
In turn, we notice that since last year USDCAD bulls have been facing difficulty in clearing current trading zone, see the chart (zoomed out). This scenario may be repeated now i.e. double top pattern, neckline break then decline. Possible double top neckline resides at 1.3202. see the chart (zoomed in). That said, the weekly support levels and the trading zone/s marked on the chart should be kept in focus.
USD/CAD four hour PRICE CHART (Jan 23 – FEB 25, 2020)
Looking at the four- hour chart, we notice that in February 10, USD/CAD peaked then corrected its uptrend move and developed a broadening top pattern. This pattern is usually a bearish.
Thus, a break below 1.3271 could send USDCAD towards 1.3226. Nevertheless, the daily support level underlined on the chart should be watched closely. On the flip side, a break above 1.3335 might cause a rally towards 1.3378. Although, the weekly resistance level printed on the chart would be worth monitoring.
See the chart to figure out 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.