On the daily chart below, we can
see that USDCAD has been pretty much rangebound for half a year, probably
because the two most hawkish central banks, the Fed and the BoC, were seen
coming to the end of their tightening cycle. We have two major levels here, the
support at 1.3300 and the resistance at
1.3665. The USD has recently started to appreciate across the board due to
stronger than expected US economic data that made the market to reprice
interest rates expectations on the hawkish side.
This development has lifted the
USDCAD and took it back to 1.3665 level from the 1.3300 support. The buyers
will now eye a break above the 13665 resistance to start targeting the previous
high at 1.3862, while the sellers will want to defend this level and target
another fall to the 1.3300 handle.
USDCAD Technical Analysis
On the 4 hour chart below, we can
see that within the 1.3300 and 1.3665 range we have another two significant
levels. The price is now near one of them at 1.3553 and it’s expected to be a
strong support. We can find here the confluence from the trendline and the 61.8% Fibonacci
retracement level.
The buyers will be leaning on
this support zone with a defined risk below it in case the price spikes down to
it. The target will be the 1.3665 high first and, upon a breakout, the 1.3862
resistance. The sellers, on the other hand, will be waiting for a break below
the 1.3553 zone to pile in and target the 1.34 handle.
On the 1
hour chart below, we can see that USDCAD is already showing signs of bottoming.
So, in case the price does not spike down to the support zone, the buyers may
start to pile in once the price breaks above the recent swing high at 1.3612.
The target would be the breakout of the 1.3665 high.
The
sellers don’t have much to lean on here as the only strategies would be to lean
on the 1.3665 resistance with a defined risk above it or wait for the downside
breakout of the 1.3553 support zone. This week the main risk event is the US NFP report on Friday where strong
readings should keep the USD bid, while misses should cause USD weakness.
This article was written by ForexLive at www.forexlive.com.