The USD/CAD has continued to prove that support levels are vulnerable in early trading today, as the Forex pair has punctured lower values and is suddenly challenging mid-July prices.
After climbing to a high of nearly 1.28000 on the 19th of July, the USD/CAD has made an abrupt turn lower in value as bearish sentiment has begun to mount pressure. The 20th of July saw a high of nearly 1.27840, the 21st displayed a high value of 1.27300, the 23rd of July produced an apex around 1.26100 and yesterday’s trading tested the 1.26000 juncture again before suddenly taking a mighty slide downwards.
As yesterday’s trading ended a low of nearly 1.24800 was exhibited and things have not reversed for the USD/CAD higher. Certainly there is no such thing as one way direction in trading and short term technical charts demonstrate this eagerly for any trader who believes stepping onto a trend is not without peril. The USD/CAD has delivered swift volatility and speculators need to practice solid risk taking tactics.
As of this writing, the USD/CAD is trading near the 1.24600 mark and this price is bouncing up against resistance levels produced in the middle of July. The juncture of 1.24400 should be given strong consideration, because if this support level fails to hold the selling tide back, the USD/CAD looks like it may be able to add velocity to the speed of its downturn. The next highlighted support level is near the 1.24200 ratio.
After trading near a low of about 1.20000 on the 1st of June, the USD/CAD has been able to demonstrate a solid bullish trend higher. However, present market conditions in the broad Forex sector indicate weakness within the USD. One potential ingredient within this trading mixture is the notion that the U.S Senate appears ready to approve a one trillion USD infrastructure spending bill, which will add fuel to the notion the U.S will continue a loose monetary policy for the foreseeable future.
Technically, if the USD/CAD breaks the 1.24250 support level which was last seen on the 7th of June, it could set off a strong dose of volatility as traders ponder even lower moves. The USD/CAD traded near 1.23010 on the 6th of July. However, traders need to focus on nearby support levels first.
Traders are urged not to be overly ambitious and they should use solid limit orders. However if a trader wants to sell the USD/CAD on slight reversals higher which challenge nearby resistance levels and look for quick trades that target close support levels as take profit wagers, this cannot be faulted.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.24850
Current Support: 1.24400
High Target: 1.25150
Low Target: 1.24100