Sustaining lower values yesterday and opening today’s trading with lower price action is another sign price velocity has been significantly downwards.
The USD/CAD is near the 1.34500 mark as of this writing and the declining price action in the currency pair has started to feel like a ‘real thing’ the past week. On Thursday the 7th of September the USD/CAD was near a high of 1.36960, which was a price it had last seen in late March of this year. The ability of the USD/CAD to trend downwards the past week and a half is rather remarkable considering the USD has done well against most other major currencies.
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However, one other currency the USD has not done particularly well against the past week has been the Mexican Peso. What do the Canadian Dollar and Mexican Peso have in common? Canada and Mexico are large producers of Crude Oil and the price of the commodity is now trading over 90.00 USD a barrel there seems to be little indication a substantial selloff in the energy sector is coming. The price of Crude Oil is a consideration that should be considered for the USD/CAD fundamentally.
The 1.35000 USD/CAD Level Has Now Become a Resistance
The movement lower in the USD/CAD has been rather pronounced regarding its sustainable momentum. After punching below the 1.350000 level this Monday, the USD/CAD has kept up the firepower and been able to demonstrate velocity and what can be considered a rather solid trend. The ability of the USD/CAD to track to lower depths and suddenly test values not seen since the middle of August is rather attractive for those who have believed the USD/CAD had been overbought.
Sustaining lower values yesterday and opening today’s trading with lower price action is another sign price velocity has been significantly downwards. The USD/CAD falling below 1.34700 this morning seemed to ignite another dose of selling which has taken the currency pair to its current values around 1.34500 with rapid action.
U.S. Federal Reserve will Impact the USD/CAD Tomorrow
- The U.S. Federal Reserve is not expected to raise interest rates tomorrow, but it will likely sound very aggressive because of the higher energy costs.
- The Fed may say they are prepared to raise interest rates again rather soon and this will impact the USD/CAD.
- Day traders should be ready for swift and volatile USD/CAD price action tomorrow, which could turn dangerous depending on the amount of surprises or fatigue the U.S. Federal Reserve delivers regarding their rhetoric.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.34600
Current Support: 1.34400
High Target: 1.34800
Low Target: 1.34050