The USD/CAD is testing early morning highs as of this writing as it incrementally continues to show a bullish trend which shows consistent price action.
As of this writing the USD/CAD is near the 1.38200 level. Earlier today the USD/CAD was trading near the 1.38325 mark and on the 11th of October the currency pair was near the 1.38550 mark. But before a trader takes the above sentence as an indication the USD/CAD is showing downward price action, they should reconsider. The USD/CAD remains within the upper tier of its price range as its comes within sight of values not generated since 2020.
Reversals Higher have been the Norm in the USD/CAD and should be given Attention
The long term trend of the USD/CAD cannot be ignored. While it may be very tempting for some speculators to sell the USD/CAD because it is trading consistently near highs, this contrarian pursuit could prove to be a costly mistake unless very strict risk management is being used.
Technically there is little dispute that the mid and long term price trend of the USD/CAD has been bullish. Rhetoric from the U.S Federal Reserve the past week has continued to display a serious tone that interest rates will continue to be raised. Inflation in both Canada and the U.S is elevated and this is proving a rather difficult fact and spurring on tough central bank policy. While many people believe the USD/CAD will eventually start to see selling and its value decrease, choosing when that is going to happen remains tricky.
If the USD/CAD challenges 1.38250 and 1.38300 realms this could be another Bullish Signal
- Traders looking for resistance to sell the USD/CAD may want to reconsider their tactics, and instead consider buying the Forex pair when support levels are tested.
- If the 1.38200 sees sustained value above, this could spark additional short term buying of the USD/CAD.
The USD/CAD is a major currency pair and it reflects the behavioral sentiment of financial institutions. Global markets remain fragile and continue to demonstrate choppy conditions which are producing volatile price action towards the end of the day’s trading in North America consistently. In the near term the USD/CAD will remain volatile, particularly as investors react based on the concerns they have regarding economic outlooks.
The USD/CAD remains within the claws of a strong bullish trend and betting against this is dangerous. Retail traders who use strict risk taking tactics and use current support levels as places to ignite buying positions may continue to find that these are worthwhile wagers. If support proves durable near the 1.38175 to 1.38150 realms, additional upside price action may be demonstrated that flirts with higher values.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.38250
Current Support: 1.38175
High Target: 1.38650
Low Target: 1.37890
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