The USD/CAD has been able to maintain its short-term bearish momentum which began in earnest only yesterday. A high of around 1.28530 was achieved on the 3rd of December, but yesterday's and today’s trading have seen the USD/CAD move lower and the pair is now hovering near the 1.27715 vicinity with its typical fast paced changes being demonstrated.
The USD/CAD is still within the higher end of its long-term range when technical charts are viewed. Speculators have a tough decision to make regarding the Forex pair’s short-term direction, technically the USD/CAD may look to be in overbought territory, but traders who are conservative may want to see more selling momentum develop before trying to jump onto the short-term trend which has recently been exhibited. Skeptical speculators cannot be blamed for suspecting the move downwards by the USD/CAD may simply be part of a natural cyclical reaction which will see reversals higher ensue.
However, if the USD/CAD does break through the 1.27000 level in the short term and shows an ability to create sustained trading near support around the 1.26800 ratio, traders may believe that technically the pair is beginning to show signs of a stronger bearish move. If the lower price realm gets a sincere test and values from the November 24th date begin to be challenged, traders may believe the 1.26330 vicinity could be displayed. However, traders are cautioned not to be overly ambitious within the present market conditions which have been choppy.
Risk-taking tactics should be carefully considered before trading the USD/CAD. Technically, the USD/CAD certainly has a core group of speculators who are likely looking at the Forex pair and believe it can retest values seen in the fourth week of November, but because of rather whipsaw price action in recent trading the use of take profits and stop losses are strongly recommended.
The USD/CAD has the ability to move quickly and short-term speculators may want to wager on the pair producing rather rollercoaster-like results in the short term. Momentum trading, which takes advantage of support and resistance levels proving durable, may prove interesting today. The 1.27100 location may prove to be a speculative opportunity to actually buy the USD/CAD and look for moves upward. Resistance near 1.27250 to 1.27300 could propel short term moves lower today.
Canadian Dollar Short-Term Outlook
Current Resistance: 1.27300
Current Support: 1.27050
High Target: 1.27950
Low Target: 1.26650
