USD/CAD Price Technical Forecast
- Bulls ease up, yet still in charge
- USDCAD eyes a test of 1.3200 handle
Multi-Month High – USD/CAD Price
On Friday, USD/CAD printed 1.3464 – its highest level in nearly nine months, ending a long downtrend move, see the chart (zoomed out).The market retreated after, as some bulls seemed to cut back. Yet, the weekly candlestick closed in the green with 1.2% gain.
This week, the Relative Strength Index (RSI) dropped from 68 to 58 highlighting weaker uptrend momentum.
USD/CAD DAILY PRICE CHART (May 1, 2018 – Mar 3, 2020) Zoomed Out
USD/CAD DAILY PRICE CHART (SEp 24 – Mar 3, 2020) Zoomed In
From the daily chart, we noticed that last week USD/CAD rallied above 1.3400 handle then pulled back after and closed with a shooting star pattern signalling to a possible reversal. This week, the price moved to a lower trading zone 1.3291 – 1.3382 eyeing a test of the low end of it.
A close below the low end reflects more hesitation form bull’s side. This could lead some of them to cut back further causing the price to correct towards 1.3220. Further close below that level may send USDCAD even lower towards 1.3104. Having said that, the daily and weekly support levels underlined on the chart (zoomed in) require special attention.
On the other hand, any failure in closing below the low end of the zone may keep the uptrend move intact i.e. could lead bulls to push towards the high end of the zone. Further close above 1.3419 might encourage bulls to rally USDCAD towards 1.3511. Nevertheless, the weekly resistance levels marked on the chart should be monitored.
USD/CAD four hour PRICE CHART (Jan 23 – Mar 3, 2020)
Looking at the four- hour chart, we notice that since the third week of January USD/CAD has been trading higher. However, the chart provided a possible reversal signal as the pair developed a head and shoulders pattern. Therefore, a break below the neckline located at 1.3315 could send the price towards 1.3176.
Thus, a break below 1.3283 may lead USDCAD towards 1.3226. Although, the daily support level should be kept in focus. In turn, a break above 1.3426 may cause a rally towards 1.3493. In that scenario, the weekly resistance level printed on the chart should be watched closely.
See the chart to find 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
