Since breaking below the 1.290000 level late last week, the bearish pace of the USD/CAD has been energized and is testing important long-term support.
The bearish trend within the USD/CAD has developed a strong dose of energy the past couple of trading sessions. After seeing the 1.29000 juncture crumble late last week, the Forex pair has seen another leg down as downward pressure has found additional momentum and support is now testing values last traded in the spring of 2018.
The USD/CAD opened this morning within its lower price range and has not experienced a strong reversal higher. Although there has been a slight bullish climb this morning, the price of the Forex pair has sustained its lower values and the 1.28500 level may prove to be a key barometer as a resistance juncture. Short-term resistance currently looks to be the 1.28350 level early today, but resistance via technical charts is exploring essentially new boundaries considering the pace of the recent bearish momentum and its ability to penetrate important support levels late last week.
Speculators who believe too much value was gained by the Canadian dollar last week may be tempted to look for reversals higher short term, but they should also keep in mind that the 1.29000 juncture, upon being broken lower, proved to be a key psychological mark. If the USD/CAD is able to sustain its value below current resistance levels today and tomorrow and begins to show accumulation, it may prove a new price band has been established.
Looking for additional downside momentum may appear to be asking for too much short term from the USD/CAD. However, if the current values as of this writing continue to trade near 1.28280, traders may believe another leg down could develop. Short-term speculators should watch momentum via technical charts. Buying the USD/CAD and wagering on slight counterattacks higher may seem like the appropriate speculative position short term.
However, reversals higher could set off another wave of bearish momentum in the USD/CAD. Quick-hitting limit orders may prove to be a solid speculative technique while trading the Forex pair near term in order to take advantage of small reversals as the Forex market looks for equilibrium within these new lower depths of the USD/CAD price band.
Canadian Dollar Short-Term Outlook:
- Current Resistance: 1.28350
- Current Support: 1.28180
- High Target: 1.28500
- Low Target: 1.27760