USD/CAD looks set to extend a weeks-long uptrend as it trades sustainably above a key inflection point!
Will the U.S. dollar aim to return to its November highs this week?
We’re taking a closer look at the 4-hour time frame:
USD/CAD 4-hour Forex Chart by TradingView
Less dovish remarks from FOMC members last week had traders rethinking their expectations for a December rate cut. The tone from policymakers felt a little firmer, and that was enough to make the market blink.
Up north, the Canadian dollar is not getting much love, even with crude oil prices ticking higher. Traders seemed more focused on global growth worries and the broader mood in risk assets, which is keeping the Loonie from enjoying the full impact of stronger energy prices.
At the same time, some of the nerves around the missing U.S. economic data are starting to fade. With a fresh batch of potential catalysts on deck this week, the Greenback could pick up more interest. That would keep a lid on any meaningful push higher for the Loonie.
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, which has been in an uptrend since late September, hit a ceiling at 1.4140 in early November and has since pulled back to around the 1.4000 psychological handle.
That area is worth watching because it lines up with the 100 and 200 SMAs on the 4-hour chart, along with key Pivot Point levels and the major Fibonacci retracement zones.
If the pair can hold steady above 1.4000, the path opens for another look at the 1.4140 November peak and maybe even fresh monthly highs if momentum cooperates.
But if USD/CAD slips under 1.4000 and sellers start pressing their case, the pair could slide toward the S2 Pivot Point at 1.3955 near the ascending channel support and possibly set the stage for a bearish reversal.
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.
