The USD/CAD is trading near the 1.30000 level as of this writing, the last time these values saw sustained trading was on the 18th of July. On the 14th of July the USD/CAD currency pair did trade briefly above the 1.32000 mark. The spike higher seen in the middle of July reflected broad Forex conditions as the USD gained against most other major currencies, and the USD is gaining again in the short term.
Late Last Week’s Climb in the USD/CAD Likely Triggered by Uncertainty in Financial Houses
While technical traders may be able to explain away the sudden lurch higher in the USD/CAD as a natural reaction due to support levels proving they were strong, there is plenty of reason to suspect fundamental conditions have caused the outbreak of buying being displayed in the near term. Uncertainty regarding the length of time the U.S Fed will maintain its hawkish interest rate policy is causing mayhem in Forex. The USD/CAD began its move upwards after the publication of the U.S Federal Reserve’s Meeting Minutes which had no clear answers for traders.
- Financial houses may be nervous the U.S Fed will not only raise interest rates in September, but follow this hike with more hawkish actions in the months afterwards.
- Resistance levels should be monitored carefully within the USD/CAD, the 1.30000 mark will serve as a strong indication for behavioral sentiment.
Current Price Levels Should be Monitored Closely by USD/CAD Speculators
The 1.30000 juncture in the USD/CAD saw trading above this ratio in early May, mid-June and the first two weeks of July. As questions again become inflamed regarding U.S central bank policy and the price of energy remains within the lower rungs of its value range taking the last seven months into view, the USD/CAD may continue to challenge the 1.30000 mark. The USD/CAD has seen volatility the past week of trading and speculators should use their risk management carefully.
While it may be tempting to believe the USD/CAD is overbought and a natural reversal lower will occur, the results from the last couple of days of trading are a sign behavioral sentiment is nervous. If sustained trading were to be demonstrated above the 1.30000 level, some traders may be tempted to target slightly higher price levels for quick hitting results. Marks of 1.30100 to 1.30200 may become legitimate wagers for speculators who believe additional buying is going to develop short term.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.30085
Current Support: 1.29800
High Target: 1.30550
Low Target: 1.29400
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