USD/CAD Technical Outlook
- USD/CAD trading near the 12950 level, a big one from December 2019
- Will it act as resistance again or could we see a big breakout?
USD/CAD Technical Outlook: Big Level Lies Ahead Just Beneath 13000
USD/CAD has been on the offensive lately and this is bringing into a familiar level dating to December 2019. The 12950 level started out then as support and was later validated as such in November 2020 after it induced a minor bounce.
It quickly became resistance in December 2020 and has acted as a meaningful high twice since then – in August and December 2021. These multiple turning points are making each new test an increasingly important one.
The question is whether we will see another rejection or breakout. USD/CAD tends to have violent turns when it turns, so if it is going to act as resistance it will probably do so with a bang. A poke thru and reverse could set up shorts for another trade.
While a firm breakout above 12950 on a daily and weekly closing basis could send USD/CAD much higher. In the event we see a confirmed breakout then the 12950 will go from acting as resistance to a new form of support.
The timing of this is up in the air. USD/CAD isn’t very far away from testing resistance, but then again it was close back in early March before reversing lower. For now, just being patient. It seems at some point sooner rather than later we will see a resolution of some type.
USD/CAD Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
