The USD/CAD is now challenging values last seen September 2017. After hitting a high of nearly 1.4650 on the 9th of March in 2020 during the height of nervous coronavirus implications, the USD/CAD has demonstrated a solid bearish trend and is trading slightly above the 1.21000 as of this writing. In the fourth week of November 2020, the USD/CAD was able to puncture pre-coronavirus values below the 1.30000 mark.
The trend has been clear technically, and the ability of the USD/CAD to traverse through additional support levels the past handful of months now has it knocking on values which have not been sincerely traded since 2015. While the September 2017 level may look significant as support, it is actually values from April of 2015 which should be looked at, which means traders need to engage long-term technical charts for perspectives regarding potential moves.
The USD/CAD is showing little inclination to suddenly mount a strong reversal higher. Yes, countermoves are a natural part of the Forex landscape and the USD/CAD was trading near a high of 1.26500 on the 21st of April. Speculators with an urge to trade against the dominant trend and buy the USD/CAD are free to do so, but they should have a solid risk-taking strategy in place as they look for a retest of resistance levels above.
The 1.21000 mark is now being tested and, if it proves vulnerable, the 1.20650 mark will become an interesting target for speculators. Traders should not be overly greedy; if they have been able to produce winning positions, now may be the time to cash in wagers if they are showing a profit. Watching cash vanish into thin air as short-term technical reversals take place can ruin a trading day.
The USD/CAD’s bearish momentum certainly saw a great deal of velocity develop late last week. Traders cannot expect a one-way avenue within the USD/CAD to be maintained, but they cannot be blamed for believing that additional downside may develop near term. Cautious traders may want to wait for slight reversals higher when short-term resistance levels are tested to activate their selling positions to try and capture more bearish momentum.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.21350
Current Support: 1.20850
High Target: 1.21750
Low Target: 1.20420
