USD/CAD might be gearing up to extend its longer-term uptrend!
Think the pair will make new monthly highs in the next couple of days?
We’re taking a closer look at the 4-hour time frame:
USD/CAD 4-hour Forex Chart by TradingView
The U.S. dollar lost ground against several major currencies on Monday as traders warmed to the idea that the government shutdown might actually be ending. That shift had investors buying risk assets again, including the commodity-linked Canadian dollar.
The Loonie also caught a lift from higher crude oil prices, which tend to support Canada’s currency whenever energy markets firm up.
If the upbeat tone does not last, USD CAD could easily find itself bouncing back from this slide.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Canadian dollar and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/CAD has been in a steady uptrend since late July, but the pair recently turned lower after hitting resistance near 1.4140. It is now trading closer to the 1.4050 psychological level.
As you can see, the current levels line up with the mid-channel zone of the ascending channel on the 4-hour chart. Not only that, but it also sits near the 100 SMA and the 50% Fibonacci retracement of the late October upswing.
If buyers keep stepping in and USD/CAD holds above 1.4050, the pair could work its way back toward the 1.4150 swing highs and possibly even challenge new highs for November.
But if yesterday’s pullback continues, USD/CAD could slip toward the 1.4000 psychological level and possibly slide further to the 1.3950 channel support zone.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
