- During my daily analysis of the USD/CAD pair, it becomes obvious to me that we are in a strong uptrend, and we are threatening a major resistance barrier above.
- With this being said, if the market were to break above the 1.40 level, then it opens up the next leg higher. I think we are getting close to that, but we are not there quite yet.
- The size of the candlestick for the trading session on Wednesday of course is important to pay attention to, because it gives you an idea as to the momentum and of course the serious drive for this pair to go higher.
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Technical Analysis
The technical analysis for the USD/CAD currency pair is dead set obvious, as it’s a very bullish market. We have recently pulled back to the crucial 1.38 level about a week ago and have bounced pretty significantly since then. With this being the case, I think the 1.38 area is a level that you can look at as a potential “floor in the market” when it comes to trading the USD/CAD pair. Keep in mind that this pair is typically very choppy, but it does have the occasional impulsive move like we have seen recently.
For what it is worth, the 1.4 level above is an area that could very well get broken, and if it does then I think it will see a lot of “FOMO trading” jumping into the market to push the US dollar quite a bit higher. At this point, I think if the market breaks above there it’s likely that the market will try to go looking to the 1.4250 level. Short-term pullbacks should see plenty of support underneath, and I do think that there are plenty of buyers all the way down to the 1.38 level.
For what it is worth, the 50 Day EMA sits just below the 1.38 level and is reaching toward it, and this is a situation where that only reinforces the idea of a floor being there. That being said, I do think that we are more likely to break out than to pullback in order to find that kind of value.
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