The USD/CAD remains within the stronger realms of its long-term bearish trend and important support levels are in focus.
The USD/CAD has firmly reestablished its bearish trend the past two days after sustaining a short-term reversal higher. In early trading this morning, the Forex pair is sustaining its value near the 1.26800 mark and support junctures below are likely being targeted by speculative forces. The USD/CAD was able to penetrate beneath its pre-coronavirus values in late November of 2020 when it began to challenge prices last seen in December of 2019.
Since late November, the USD/CAD bearish trend has remained unrelenting and, on the 6th of January, the Forex pair briefly touched the 1.26300 mark. The current price vicinity of the USD/CAD around the 1.268000 level is certainly within a price band tested in April of 2018. Technical traders need to look at long-term charts to try and gauge short-term perceptions with the USD/CAD. If current support levels prove vulnerable within the 1.26620 to 1.26300 junctures, traders should expect potential volatility.
The long-term bearish trend of the USD/CAD is not an open invitation for traders to merely wager on selling positions. Trading late last week showed that reversals higher can produce uncomfortable circumstances for speculators who do not practice risk management. However, traders who believe the bearish trend of the USD/CAD will remain strong cannot be blamed for logically continuing to remain intrigued by the opportunity to sell.
Technical resistance may face some short-term tests, but traders may be enticed to apply the notion that the 1.27000 mark could prove a durable stop loss juncture. If the USD/CAD is able to sustain its current price range and show short term that it doesn’t have enough firepower to create a long-lasting battle on higher values within the 1.269600 to 1.27030 range, speculators may continue to remain confident in the trend and the potential for it to create further downside capability.
Pursuing short positions of the USD/CAD remains an attractive trade for speculators. Technically, the Forex pair does appear to have further room to traverse lower and seemingly offers a better risk/reward scenario for short-term selling wagers. Trading this morning has been able to demonstrate that the USD/CAD remains within the grasp of bearish sentiment.
Canadian Dollar Short-Term Outlook:
- Current Resistance: 1.26960
- Current Support: 1.26620
- High Target: 1.27100
- Low Target: 1.26300