Traders who have been pursuing lower price action in the USD/CAD the past handful of days may be building confidence regarding their speculative perceptions. The currency pair as of this writing is around the 1.33350 ratio and continues to sustain a price realm that is keeping crucial mid-term support levels within sight. In the short-term it appears the 1.33400 mark will prove to be a rather intriguing technical resistance level.
Having proven the 1.34000 level was vulnerable last Friday and the ability to sustain values below, has apparently built up confidence among financial institutions and large players within the USD/CAD that its current realms are within a fair market range. Yesterday’s inflation numbers from Canada via the Consumer Price Index results came in slightly above expectations, but they essentially matched the previous month’s outcome.
USD/CAD and Risk Appetite as Holidays Approach
Holiday trading volumes will begin to affect Forex including the USD/CAD by tomorrow and certainly on Friday, the currency pair should be watched carefully today and early on Thursday for signals of nervousness regarding oversold sentiment. However, if the current price realms of the USD/CAD are able to maintain their current prices it will indicate sellers continue to hold power.
Speculators should be careful and not get overly ambitious in the USD/CAD, but the currency pair is certainly near early August values. The perception the USD/CAD may have the ability to test values seen over half a year ago, when the Forex pair traded between 1.31100 and 1.32000 from mid-June and into the last week of July may take hold.
Yet, traders are urged not to get over confident. The technical charts and current levels of optimism that exist in Forex regarding a weaker USD may attract speculators, but the coming Christmas and New Year’s holidays will affect the USD/CAD via thin Forex volumes. The notion that there isn’t a one way track for day traders needs to be remembered too, daily reversals higher remain an ever present part of the trading landscape and danger.
Data to Come as Volumes in the USD/CAD Thin
- Growth numbers via the U.S tomorrow and from Canada on Friday will be delivered via Gross Domestic Product results. However, as financial institutions begin to disappear for the holidays, these outcomes may not have much of an impact.
- Traders looking for downside from the USD/CAD should remain realistic regarding their goals; targeting quick hitting trades (no matter the chosen direction) could prove helpful the remainder of the week.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.33390
Current Support: 1.33325
High Target: 1.33625
Low Target: 1.33010
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