The USD/CAD is near the 1.35350 mark as of this writing with rather steady price action being demonstrated. The 1.35000 to 1.35500 ratios have seen plenty of price action for nearly a week and today could prove intriguing for speculators who want to pursue the USD/CAD for short-term wagers. Important inflation statistics will come from the U.S today via Consumer Price Index data. The results are certain to cause an affect for the USD/CAD.
Behavioral Sentiment has Shown Clues of Shifting but can these Signals be Trusted?
In the past week of trading there have been signs from financial houses they have shifted their sentiment and seem to be positioning for a weaker USD. Bearish price activity in the USD/CAD has mirrored other major currency pairs. Late last night’s sudden flourish of reversals higher was seen in many currency pairs versus the USD, this as fragile market sentiment saw major equity indices selloff and nervousness grow.
Today’s fundamental data from the U.S may come in negative and show inflation remains steady, but many financial players have accepted this notion already. The USD has been in a strong bullish mode for a long time and only in recent weeks has evidence of a shift of trading started to be demonstrated and the question is if this will prove to be a mirage. In other words will the USD/CAD suddenly revert back to its strong bullish trend and kill off any hope of a real bearish trajectory?
Today’s Trading Volume in the USD/CAD should be Watched Carefully
- Banking holidays in Canada and the U.S will be observed on Friday and trading volume in the USD/CAD tomorrow could be very quiet, meaning today’s action before going into a long weekend could prove volatile.
- The 1.35100 support level should be watched carefully today, if it proves durable perhaps the USD/CAD will trend upwards and test the 1.35450 ratio, but 1.35500 has looked solid as resistance in the short-term.
Retail traders should be careful today because of the potential for increased volatility due to U.S inflation data and banking holidays tomorrow. Traders looking to wager on more downside price action from the USD/CAD should not be overly ambitious before going into the weekend and be ready for a test of the current price range which could exhibit choppiness and a possible breakout.
Canadian Dollar Short Term Outlook:
Current Resistance: 1.35475
Current Support: 1.35103
High Target: 1.35910
Low Target: 1.3425
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