The USD/CAD is trading near the 1.30675 mark as of this writing, but conditions are fast and changes of value need to be checked on to decipher short-term price action. The value of the USD/CAD continues to incrementally step higher and yesterday’s highs reached nearly the 1.31090 juncture. In the middle of July the USD/CAD currency pair touched 1.32250 momentarily. On the 25th of August the USD/CAD reached the 1.28940 mark to lend perspective regarding the wide price range.
The USD/CAD has reacted to the Potential of More U.S Federal Reserve Hawkish Policy
The combination of a rather hawkish speech from U.S Federal Reserve Chairman Powell on Friday, and Crude Oil prices which has slipped slightly may be fueling nervous speculative buying within the USD/CAD. Last week’s ability to trade lower after touching highs on the 21st and 22nd near the 1.30000 created solid selling results, but financial institutions continue to display nervous sentiment regarding economic data and the USD/CAD has gained again.
- Gross Domestic Product data will be published in Canada today and an expected gain of 0.1% is expected.
- Recessionary concerns and rising inflation are hampering Canada like many of the major global economies, which are causing weakness in the USD/CAD.
Incremental Move Higher in USD/CAD Remains Long Term Theme
The USD/CAD has certainly produced a rather long term bullish trend, but short term speculators cannot afford to simply put buying positions into their trading platform and allow them to work blindly. Reversals are common in the USD/CAD and its trading range is rather wide, particularly for speculators who are using leverage to try and gain faster and larger profitable results.
Holding positions overnight and absorbing the costs of trading can prove difficult too in order to produce solid results. Traders who can put positions on for long term considerations do not represent the majority of retail traders. Support and resistance levels need to be constantly interpreted. The USD/CAD may feel like it is overbought to many traders currently, but the trend has incrementally produced higher values. If short term resistance near the 1.30800 to 1.30900 realms is flirted with near term it could set off another challenge of 1.31000.
Traders who want to be active for quick hitting results in the USD/CAD should be careful today and perhaps wait for the results of the Canadian GDP data. Choppy conditions are likely to flourish the remainder of this week as financial houses are challenged by the higher range of the USD/CAD and the unclear economic window which is still causing nervous sentiment.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.30810
Current Support: 1.30480
High Target: 1.31350
Low Target: 1.29650
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