The USD/CAD continues to produce a rather choppy trading terrain, but intriguingly, the rather swift trends in the Forex pair make it an attractive speculative wager. The past month of trading has essentially produced a trading range between 1.24750 and 1.26270 with occasional outlier values being demonstrated. As of this writing, the USD/CAD has seen another mover higher and is within sight of important resistance levels.
The USD/CAD is trading slightly below the 1.26000 mark, which has exhibited a tendency to be a solid important juncture, except yesterday this level failed to hold back bullish momentum. However, the USD/CAD is not an emerging market currency pair, and what may be an additional bonus for speculators is the notion that fundamental and technical sentiment may be combining their talents now and about to produce another reversal short term.
It is possible from a fundamental perspective that the Canadian dollar lost some ground on the merits of the Canadian budget being announced recently. The USD/CAD essentially started yesterday’s trading session near lows around the 1.24880 mark and produced a swift climb higher likely based on anticipation and reaction to the government pronouncement. However, later in the day, the USD/CAD did begin to see resistance work its magic and the higher ground of 1.26200 held.
Short-term speculators should watch the 1.26000 level carefully. If the current price junctures of 1.25990 to 1.26050 hold their ground as resistance, downside pressure may begin to emerge. Traders should remember that the USD/CAD does have the ability to trade rather fast and they need to be using their risk management wisely to guard against sudden moves which can go the wrong way.
It appears from a technical view that the USD/CAD may be too high. A consistent bearish trend has been hard to establish within the USD/CAD, but there have been hints that the forex pair might be able to produce downward momentum. While the past month of trading has certainly produced a choppy trading ground, the USD/CAD has also shown that resistance levels have been capable of producing rather consistent reversals lower. While the USD/CAD languishes slightly below important resistance, now may be the time to sell and look for downward price action to develop short term.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.26100
Current Support: 1.25800
High Target: 1.26470
Low Target: 1.25080
