The USD/CAD is trading near the 1.33730 mark as of this writing; this after it touched a high around the 1.34160 ratio yesterday. The ability of the USD/CAD to incrementally march higher is likely taking some traders by surprise if they have held bearish perspectives regarding the currency pair. Trading volumes are starting to return to normal conditions, and tomorrow’s CPI data from the U.S will likely be the biggest day of trading since the middle of December.
The USD/CAD has traded lower this morning, but the currency pair’s value remains within the higher elements of its post-Christmas value price range. However, intriguingly the USD/CAD is now trading near values last seen from the 15th until the 20th of December. Financial institutions are likely waiting for tomorrow’s inflation data via the U.S Consumer Price Index to confirm their outlooks. A look at a one-month chart of the USD/CAD still demonstrates a significantly lower price range, the currency pair was trading near the 1.36070 ratio in the second week of December.
Short-Term Wagers Need Risk Management
While the price action of the USD/CAD has incrementally climbed early this week, the reversal lower after touching yesterday’s highs may indicate the currency pair is overbought. But before day traders launch massive selling positions of the USD/CAD they need to understand their time window for quick hitting trades will begin to vanish. Tomorrow’s anticipated inflation numbers from the U.S. will cause a massive reaction in the broad financial markets and the USD/CAD will see price velocity erupt.
Top Forex Brokers
Short-term speculators should consider the notion that if quick-hitting targets are sought it will be wise to not be carrying open positions into tomorrow’s USD/CAD trading. Support near the 1.33700 level should be monitored in the short term; if this level proves vulnerable it is possible the USD/CAD could begin to roam slightly lower in the coming hours, particularly if values are sustained below the value.
USD/CAD and Volatility to Come as Inflation Data Approaches
- Short-term traders may continue to be able to take advantage of slight reversals in the USD/CAD over the next handful of hours and into the night.
- However as the U.S CPI inflation data approaches traders should be prepared for volatility to develop, particularly as large players of the USD/CAD begin to position for the economic results.
- Traders who believe the USD/CAD has more potential downside to accomplish may want to wait until tomorrow’s CPI results have been published, until then choppy conditions could prove dangerous.
Canadian Dollar Short-Term Outlook:
Current Resistance: 1.33790
Current Support: 1.33690
High Target: 1.33910
Low Target: 1.33320
Ready to trade our daily Forex analysis? We’ve made a list of the best forex brokers in Canada for beginners to trade Forex worth using.