The USD/CAD reached a high of nearly 1.25770 in trading yesterday, which actually tested prices last seen on the 28th of July when the Forex pair produced a rather strong bearish move which lasted until the 30th. A reversal higher has taken place since the USD/CAD touched a low around the 1.24200 level on the 30th of July and culminated in yesterday’s apex.
However, the price range within the USD/CAD the past week which has seen solid reversals and created speculative conditions for traders, also has largely kept its trading range intact. And what is intriguing about yesterday’s results is that the highs ran into resistance and moved lower, and in fact the move higher yesterday did not actually test the resistance band which has existed near the 1.26000 juncture since the 22nd of July. The inability to seriously challenge this ratio yesterday may create the perception that the USD/CAD could be incrementally lowering its resistance levels still, which could signal that additional bearish price action can ensue.
As of this writing, the USD/CAD is near the 1.25350 mark and the 1.25000 level should be watched carefully. If the 1.25200 to 1.25100 levels begin to get tested and trading cannot be sustained above these levels, bearish speculators may believe that another test of lower support is about to be demonstrated. Yesterday’s low water mark for the USD/CAD was near the 1.24920 level. Consolidated trading today may be a sign that further tests of lower values is a worthwhile speculative outlook.
Yes, the USD/CAD has enjoyed a significant bullish trend since early June, but the highs seen on the 19th of July are beginning to feel like a distant technical memory. Yesterday’s inability to dramatically test the 1.26000 mark may mean that the current price range of the USD/CAD remains a dominant theme and its support and resistance levels can be used as appropriate tactical values for placing trading positions based on technical perceptions.
Selling the USD/CAD if it touches the 1.25500 level may be a rather intriguing trade for conservative traders. More aggressive speculators who believe that further downside price action is going to be demonstrated sooner rather than later may believe that shorting the USD/CAD even near the 1.25400 vicinity could lead to solid outcomes. Stop losses can be placed close and traders should be careful not to over leverage their positions. Selling the USD/CAD may be the correct wager today for traders.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.25610
Current Support: 1.25200
High Target: 1.25980
Low Target: 1.24290
