USD/CAD Technical Outlook
- USD/CAD running towards 2-yr+ level located around 12950
- Will it finally break through if tested, or turn price back lower again?
USD/CAD Technical Outlook: Running Towards Significant Long-term Level
USD/CAD is coming off a nice set-up from confluent support consisting of a trend-line from the summer and the 200-day moving average. The sprint higher has a major long-term level of resistance in focus around the 12950 level, one that has acted as a ceiling for over a year.
The level dates to the final trading session of 2019 prior to the pandemic panic rip. The level held as support temporarily in November 2020 before becoming resistance on three occasions since. The most recent reversal off the 12950 area was in December.
With the way USD/CAD is ripping it may not be long before we see resistance tested. Perhaps a set-back develops prior to its arrival, but overall it is anticipated at some point soon we will see something develop around 12950.
That something may be another top, or at least a temporary one, or it could be a breakout that paves the way for even higher prices. As per usual, it’s all about the price action that unfolds around major levels. Does a rejection develop or strong momentum play out – or something in between?
Too soon to tell, obviously, but worth keeping on the radar as time moves on. For now, unless long from good levels (i.e. confluent support), new longs don’t hold much risk/reward appeal as a set-back could develop that leaves fresh positions vulnerable. There isn’t really any good level to lean on for setting stops at this time. Shorting holds no appeal in the absence of any meaningful resistance, but that could should we soon get to 12950.
USD/CAD Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
