The USD/CAD is producing a rather steady diet of fast paced value changes as it traverses within its upper range. Intriguingly the USD/CAD is bouncing around short term technical resistance, which if it proves durable could ignite speculative selling. Short term traders need to understand Forex conditions for the USD/CAD currency pair are under large shadows of nervous behavioral sentiment.
Volatile Mix of Fundamentals and Technical Considerations for USD/CAD
As of this writing the USD/CAD is near the 1.29775 mark, but readers are urged to compare this to the market as they contemplate wagering. A violent mixture of fundamental and technical perspectives should be considered to gain insights; strong gut instinct may prove important too, along with carefully selected risk taking tactics.
- Energy prices via Natural Gas are near highs and this could help the value of the Canadian Dollar, besides the price of Crude Oil too which remains profitable for producers such as Canada.
- Economic policy speeches via the Jackson Hole conference with the top global central bankers taking place will affect sentiment near term over the next few days.
Canadian Economic Data Remains Sketchy and USD/CAD feels Weight of Central Banks
The Bank of Canada remains under pressure to likely stay hawkish and match U.S Fed policy. Economic conditions in Canada match other major economic spheres as inflation and recession threaten. The housing data in Canada has shown some signs of distress via prices. Technically the USD/CAD remains in what can be considered overbought territory by many. Intriguingly from a fundamental consideration, the high price of Natural Gas of which Canada is an exporter, may factor into some selling pressure of the USD/CAD.
Short term traders should be prepared for more turbulent conditions and choppy results near term. Behavioral sentiment is bound to remain nervous and reactionary. Resistance levels may prove to be interesting junctures to launch selling positions with well-chosen stop losses above which are not so close. If this method of using a wider stop loss compared to a closer take profit is used in the USD/CAD it is urged that a limited amount of leverage is selected.
The USD/CAD is bound to remain volatile, but near term wagers looking for downside with quick hitting targets below may find them to be worthwhile wagers. Traders are urged not to be overly ambitious in the near term, because sudden reversals are likely to occur which tests the willpower of positions that are not protected with risk management. Potentially aiming for the 1.29725 mark in the short term and slightly below may be intriguing for short term bearish bets.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.29840
Current Support: 1.29725
High Target: 1.30425
Low Target: 1.29500
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