The USD/CAD has maintained its lower price range attained over the last month of trading, but short-term values are in the middle of its five day results.
As of this writing the USD/CAD is near the 1.34100 juncture and within the middle of its one-week price range. However, the currency pair has been able to sustain its lower values and its a rather incremental trend downward achieved the past month. Friday’s low was near the 1.33230 ratios, followed by a high of nearly 1.34440 later in the day.
The absence of U.S Financial Houses yesterday may have caused Choppy USD/CAD
Large financial institutions were absent from trading in the U.S. because of the Martin Luther King holiday yesterday. This may have been a reason the USD/CAD produced choppy consolidated conditions. The return of full volume and critical data today sets the table for an interesting trading day and speculators should watch the price action that is displayed carefully. Canada will release its important Consumer Price Index readings today.
Inflation in Canada like the U.S. is a large concern and the Bank of Canada in many ways has been mirroring the rhetoric of the U.S Federal Reserve. The fact that U.S. inflation showed it was slowing last week via its CPI statistics may lead some speculators to wager on the potential that a similar result will be shown in Canada today.
Behavioral Sentiment is Fragile and the USD/CAD will feel its Results
- The 1.34000 mark may become an important near-term ratio. If the price of the USD/CAD hovers near this level, it may indicate financial houses are sitting on the fence. However, upon the publication of the Canadian CPI results today, there is certain to be some volatility.
- The choppy USD/CAD conditions seen yesterday may remain, but consolidation is likely to break based upon the sentiment generated by the inflation data from Canada.
Traders who are maintaining a bearish stance and looking to sell the USD/CAD cannot be faulted, but they should be extremely careful before the inflation reports from Canada today. Yesterday’s price action is a reminder that risk management is essential. If the CPI results published today in Canada show that inflation is weakening, traders should expect volatile conditions in the aftermath, but after the dust settles the USD/CAD could then trade slightly lower and challenge support levels below.
Traders should remain realistic regarding their targets and use take-profit orders to cash in winning positions if they are accomplished. The USD/CAD is within sight of important lower values when looking at a three-month chart and near-term results may continue to traverse within this realm.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.34250
Current Support: 1.33920
High Target: 1.34475
Low Target: 1.33370
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