USD/CAD: Steps Upward Quicken as Long Term Highs Sighted

The USD/CAD continues to sustain its higher range, and momentum upwards has brought long term apex values into consideration.

The bullish trend in the USD/CAD remains intact, and Monday’s high above the 1.38000 level feels as if it can be challenged again.  Yes, a reversal lower from Monday’s high did produce a depth yesterday of nearly 1.36370 in early trading. However, after the move lower the USD/CAD suddenly found strong momentum higher again and touched the 1.37775 vicinity. In addition, early trading this morning penetrated yesterday’s high and has sustained the higher tier of its long term range technically.   

Fast Conditions in the USD/CAD and Vulnerable Resistance are Being Demonstrated

As of this writing the USD/CAD is traversing next to the 1.37900 mark and is producing quick price action, which speculators need to be prepared for if they want to pursue trading. Choppy conditions are evident, but support levels continue to show that they are rather durable.

Technical traders can dig into long term charts and clearly see the USD/CAD traded above the 1.40000 mark during the coronavirus crisis in 2020, but more interestingly the Forex pair traded above the 1.40000 in late 2015 and early 2016. In fact, the USD/CAD traded near the 1.47000 marks momentarily during both of these previous bull runs. This is highlighted to show the USD/CAD has a history of trading within its current ratios and speculative bears should be cautious if they bet on reversals lower happening.

The 1.37900 in the USD/CAD could be a Catalyst

  • Traders should monitor the 1.37900, if its value is sustained this could be an indication additional bullish behavior will pursue buying positions of the USD/CAD near term.
  • The bullish trend in the USD/CAD has been strong and may prove to have additional strength for buying wagers.

Nervous global market conditions combined with the acknowledgement the U.S Federal Reserve will remain hawkish over the next few months and possibly beyond, continue to create bullish conditions for the USD/CAD. Yes, reversals lower are a natural part of the day’s trading cycle, but support levels seem to be working as springboards to initiate buying positions for quick hitting trades upwards using take profit targets.

Speculators as always are urged to remain conservative. Fluctuations in the price of Crude Oil and Natural Gas are concerns and could help the Canadian dollar short term. Hurricane Ian in the Gulf of Mexico and Florida looming the next two days remains troubling. And the prospect of ‘nation’ sanctioned sabotage of a gas pipeline near Denmark having occurred and becoming known yesterday, could combine to create higher energy prices. However, the trend of the USD/CAD has been bullish and speculators may be tempted to continue pursuing this trajectory.

Canadian Dollar Short Term Outlook:

Current Resistance: 1.37970

Current Support: 1.37805

High Target: 1.38210

Low Target: 1.37510

USD/CAD

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Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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