Tue, Mar 21, 2023 @ 02:01 GMT
HomeContributorsTechnical AnalysisCould USD/CAD Stage A Surprise Comeback?

Could USD/CAD Stage A Surprise Comeback?

At the time of this writing, the US dollar was still down against most major currencies. The greenback fell on the back of an earlier report from Bloomberg – citing people familiar with the matter – that China is considering reducing or halting its purchase of US government debt. While the dollar has fallen against most currencies, it has still outperformed the British pound and the Canadian dollar. The USD/CAD actually managed to close higher both on Monday and Tuesday, and as mentioned, is higher again today. It has made back the losses suffered on the back of Friday’s stronger Canadian jobs data and weaker US employment figures. What’s more, the commodity currency has failed to track oil prices higher, despite both Brent and WTI rising sharply in recent days. This may suggest that FX market participants are not convinced that the rally in oil may be sustainable. We also think that oil prices may head lower, as we discussed it in our oil report yesterday

So price is refusing to do what it ‘should’ be doing. Usually this is a bullish sign. But for us technically-minded analysts and traders, the USD/CAD needs to break and hold above the 1.2500/15 resistance area in order to suggest that the buyers are back in control in this pair. However if the Loonie starts heading lower from this previous support area then we would have to put our bullish idea on hold. So it is one to watch for now.

DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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