The USD/CAD continues to trade near crucial long-term support levels after making a strong move downwards on the 28th of April. What should intrigue speculators is the lack of a serious reversal higher after the bearish price action kicked into gear last week. Yesterday produced another morsel for traders to take into consideration, a high of 1.23500 was tested on Tuesday; but this move higher developed after a low of 1.22650 was tested on the 3rd of May, which was also touched on the 29th of April.
In early trading today, the USD/CAD remains within the lower depths of its value and bearish sentiment remains clear. The lack of a serious challenge higher within the Forex pair the past week and yesterday’s price action is a technical indication that further downwards movement may be in the cards sooner rather than later.
Support near the 1.22750 to 1.22650 junctures could prove to be a lynchpin within the USD/CAD. If these values are punctured, a real test of 1.22500 could be seen in a blink of an eye. If values from early 2018 are proven to be vulnerable, from a technical perspective and behavioral sentiment viewpoint, the USD/CAD could seriously challenge the 1.21000 value landscape in a hurried fashion.
Speculators may want to stay aggressive within the USD/CAD. The ability of the Forex pair to trade below the 1.23000 level should be monitored carefully; if values remain intact below this crucial juncture speculative forces cannot be faulted for believing further bearish momentum is going to be expressed. Traders should remain cautious with the amount of leverage they are using if they are targeting values which are still rather far away from current prices; the use of stop-loss and take-profit orders are encouraged.
Selling the USD/CAD on slight moves higher from its present price vicinity looks like a solid speculative wager. After the large bearish move seen in the Forex pair only one week ago, it appears that technically and fundamentally the USD/CAD may have further room to traverse downward. Speculators should anticipate reversals higher that could prove uncomfortable, but if current resistance levels are effective, the USD/CAD may be indicating that there is more bearish activity coming where an advantage can be found.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.23280
Current Support: 1.22750
High Target: 1.23500
Low Target: 1.22500
