The USD/CAD has incrementally risen in value the past week-and-a-half and important resistance junctures are in sight.
The USD/CAD has seen a bullish trend emerge the past week-and-a-half, but the Forex pair is still trading comfortably below early March high water marks. Even as important resistance junctures come within eyesight for technical traders, the notion that the USD/CAD will be able to resume its long-term bearish momentum likely remains attractive for many speculators. The resistance level of 1.26250 is a crucial mark for the USD/CAD and if this value proves adequate, traders may feel inclined to proceed with selling.
However, the past couple of weeks of trading have been difficult, as traders who have been selling the USD/CAD try to determine when the bleeding will stop. On the 18th of March, the USD/CAD was trading near lows of 1.23750 which had not been seen since January of 2018. The ability of energy prices to rise in value certainly has helped the USD/CAD the past few months, but some traders may believe the extra ammunition of stronger commodity prices may have run out of power near term.
Global risk appetite, though, remains rather attractive and the sudden emergence of a short bullish move in the USD/CAD could be considered suspect. Traders may need to be convinced that resistance levels are vulnerable before they consider buying the USD/CAD again. If the 1.262500 juncture does prove fragile, traders may eye higher values near 1.26400 to 1.26500 which were seen in early March.
Reversals are a regular feature of all Forex trading and the USD/CAD is no different. Technical traders can clearly see that the USD/CAD was trading near lows of 1.24720 on the 25th of February, before quickly reversing to the highs which tested a top price of approximately 1.2730 on two occasions with momentary spikes. The fact that the USD/CAD has been within a long-term bearish trend cannot be discounted. The violent reversals higher did happen after fresh long-term lows were made in the Forex pair.
Selling the USD/CAD may remain the best speculative wager near term. Cautious traders may want to wait for moves higher which come within sight of resistance levels before attempting to short the USD/CAD. Trading has been volatile in Forex the past couple of weeks as the USD has seen a dose of risk-averse sentiment which made it attractive, but the USD/CAD may remain a selling opportunity for traders who believe technical charts will demonstrate additional bearish activity again.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.26280
Current Support: 1.25980
High Target: 1.26480
Low Target: 1.25740