Day traders who are conservative may want to watch today’s USD/CAD values from the sidelines. However, for speculators who like the ability to wager on potentially volatile markets while using solid risk management, the USD/CAD and much of the broad Forex market will be appealing today and tomorrow. The USD/CAD as of this writing is near the 1.38200 ratio. A high of nearly 1.38550 was made on Friday, before the currency pair stumbled lower and fell to about 1.37850 going into the weekend.
Yesterday’s trading in the USD/CAD produced another day of rather choppy results with a high of about 1.38320 being challenged. After a rather steady flow of short-term reversals in the past day, the current value of the USD/CAD is within sight of yesterday’s highs but hasn’t come within touching distance. Traders and financial institutions are clearly awaiting today’s U.S Consumer Price Index numbers and market dynamics are choppy across the board in Forex, including the USD/CAD.
Perspectives as Risk Sentiment is Considered in the USD/CAD
While the USD/CAD is within sight of one week highs, intriguingly like some other major currency pairs a look at a one month chart offers a different perspective. The USD/CAD is actually trading solidly below highs made on the 1st of November when a level around 1.39000 was seen. The ability of the USD/CAD to trade below this high about ten trading days ago, highlights that risk appetite has shown some signs of life as financial institutions hold onto the notion the currency pair may be overbought.
Speculators of the USD/CAD will have their hands full today and tomorrow as important inflation data comes from the U.S via the CPI and PPI reports. Also on the schedule are Retail Sales statistics which will also be printed tomorrow.
The USD/CAD will react to the inflation data today and could find that rather choppy conditions persists over the next thirty hours as tomorrow’s Producer Price Index offers potentially different inflation results to consider compared to the CPI. Risks adverse trading globally has helped the USD stay strong, but U.S Treasuries have seen their yields come down slightly which is offering a hint that some large players in the markets may be betting on risk appetite to increase.
Support and Resistance Levels in the USD/CAD Near-Term Could be a Whipsaw
- Solid risk management will be essential for USD/CAD traders today.
- Quick-hitting targets may be preferred instead of betting on targets that are too far away and may be hard-pressed to attain if Forex becomes volatile as U.S data is published.
- The 1.37700 to 1.38400 levels as support and resistance have been fairly durable the past week, but short-term conditions today and tomorrow are likely to see this range become wider as financial houses react to the important inflation statistics.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.38340
Current Support: 1.38075
High Target: 1.38625
Low Target: 1.37550
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