The USD/CAD has provided a sustained upward climb in the past week of trading, and the current value of the currency pair is touching levels not seen since the first week of June.
On the 16th of July, the USD/CAD was trading near the 1.30900 level as financial institutions reached the apex seemingly of their bearish trajectories. Since touching this lower price level the USD/CAD has certainly moved higher and its current price as of this writing is around the 1.34250 mark. However, until the 1st of August, the USD/CAD had shown plenty of reversals lower as choppy trading mostly prevailed, while an incremental move higher was also being demonstrated.
USD/CAD Move Higher the Past Week is Rather Intriguing and Perhaps Costly
Speculators who were anticipating another reversal lower after the USD/CAD hit the 1.33000 ratio on the 1st of August were briefly satisfied with a low of around 1.32650 emerging, but since then the currency pair has seen a nearly steady rise. Bullish traders who have been expecting a move downwards back into the lower range of the USD/CAD may have found the past handful of days rather costly to their accounts if they have been stubborn. Risk adverse trading in the broad markets has sparked a higher USD.
While economic data remains a loud debate regarding results among fundamental traders, it is clear technically the USD/CAD has made resistance levels rather vulnerable. Thursday and Friday’s trading last week challenged highs from the first week of July in the USD/CAD, yesterday’s trading brushed that resistance away and the currency pair is now testing values last seen on the 7th of June.
Economic Data from the U.S will be Important Later this Week for USD/CAD
- Yesterday was a holiday in many places in Canada, however, some provincial banks did remain open, and the upwards climb of the USD may have not seen full market volume in the USD/CAD.
- This Thursday the U.S. will publish important Consumer Price Index results and the inflation results will spark behavioral sentiment reactions in Forex and certainly will affect the USD/CAD.
- Economic data has been rather tricky to interpret the past couple of weeks from the U.S., and technically the USD/CAD moving higher has likely caught some financial institutions by surprise.
Speculators who are intent on selling the USD/CAD because they believe it is overbought currently should be cautious. Bearish traders may be proven correct about the direction of the USD/CAD eventually, but timing the moment a sustained trend downward begins may prove painful for traders to pursue, particularly if they are not using proper risk management. A sustained move above the 1.34300 to 1.34400 levels for the USD/CAD may set off plenty of alarm bells for speculators who believe the Forex pair is too high, but higher values near the 1.34500 to 1.34600 were seen in early June.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.34300
Current Support: 1.34170
High Target: 1.34450
Low Target: 1.33810
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