The past few days of trading have seen the USD/CAD trade mostly within a price range of 1.34700 to 1.35250 with brief outliers. After early volatility last week, the USD/CAD has seemingly established a rather defined value realm. However, traders should not get comfortable and they need to stay alert because major risk events are on the calendar over the next day two days which will certainly shake the USD/CAD loose from its consolidation.
After the Test of 1.34050 Level on Tuesday of Last Week a Rise Higher
Strong speculative trading was seen on Monday and Tuesday of last week within the USD/CAD as the Forex pair tested a low of nearly 1.34050 momentarily. The low of last week was suddenly hit by a rather solid amount of buying and the USD/CAD climbed to a high slightly above 1.35350 on Wednesday. After those values were tested the USD/CAD has held firmly within a tighter range as financial institutions brace for tomorrow’s U.S Federal Reserve’s FOMC Meeting Minutes release. It is hoped by traders the content of the report will give an indication regarding the Fed’s interest rate decision coming on the 14th of June.
However, the FOMC report is not the only risk event ahead. The U.S. debt ceiling is causing nervous short-term trading and tomorrow the U.S. Treasury Secretary Janet Yellen will be talking. She will likely try to speak in a calm manner regarding the political fight regarding the U.S. debt ceiling agreement, but she will certainly be asked for her opinion about the subject.
The current Test of 1.35000 is Intriguing but Traders Should Anticipate a Possible Breakout
- The current price for the USD/CAD is hovering near the 1.35000 short-term, but traders should expect the price range seen in the past few days to turn volatile in the near term.
- The near term is likely to produce a breakout depending on the rhetoric from the U.S. Fed within its FOMC Meeting Minutes which will stir behavioral sentiment quickly.
- The U.S. will also publish Flash Manufacturing PMI data today, and on Thursday Prelim GDP numbers will be reported.
Traders looking to take advantage of the rather developed price range will likely be working against the clock in the next day and a half. A quiet Forex market will turn into a volatile one for the USD/CAD with sudden force. Speculators who want to wager in the short term should use solid risk management. If a trader wants to avoid the storm in the USD/CAD which will like develop tomorrow, they should remain on the sidelines. For those who want to wager on the direction of the USD/CAD, speculators will likely have to guess right regarding U.S. data and rhetoric to come.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.35140
Current Support: 1.34965
High Target: 1.35260
Low Target: 1.34820
Ready to trade our Forex daily analysis and predictions? Here's a list of the best Forex Trading platform Canada to choose from.