After a string of lower highs and lower lows, USD/CAD finally hit a major support zone that lines up with the pair’s longer-term trend.
Think USD/CAD will pop higher in the next trading sessions?
Here’s what we’re seeing on the 4-hour time frame:
USD/CAD 4-hour Forex Chart by TradingView
Improved risk appetite and talks of a Fed rate cut pushed the U.S. dollar lower earlier this week.
Meanwhile, the Loonie got a bit of love from firmer crude prices and all the risk-on vibes from U.S.-China trade optimism.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/CAD turned lower from the 1.4080 area and has been sliding the past few days, recently dipping below the 1.4000 psychological mark.
Price is now hanging around the 1.3980 zone, which lines up with the 61.8% Fib of October’s upswing, the 100 SMA, and an ascending channel support that’s been holding since late September.
If we start seeing green candles and sustained trading above 1.4000, the pair could climb toward the mid-channel area near 1.4040, maybe even back to the 1.4080 October highs.
But if sellers stay in control and push it further below 1.4000, we might see a deeper slide toward the 1.3960 or 1.3935 previous inflection points.
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.
