USD/CAD Holds Support as USD Drives

Canadian Dollar, CAD, USD/CAD Price Forecast:

It’s been a busy day across the US Dollar as comments from FOMC Chair Jerome Powell have sent both bonds and equities for a ride. Currencies, however, have been relatively calm by comparison. The US Dollar has pushed up for a test of the February high, however, and this highlights a big data point for tomorrow with the release of Non-farm Payrolls figures.

USD/CAD, however, has not set a fresh high nor are buyers pushing up for tests of significant resistance. There have been some bullish items, such as a hold of a key support level around 1.2622, or the longer-term falling wedge formation that remains in-place. Falling wedges will often be approached with the aim of bullish reversals; and in this case, that would be looking at a reversal of the trend that’s been building for almost a year now.

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USD/CAD Daily Price Chart

USDCAD Daily Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

USD/CAD Shorter-Term

While the longer-term falling wedge could keep bullish themes as an attractive option, a disconcerting item that must be encountered by USD/CAD bulls is the fact that the US Dollar is setting a fresh high but USD/CAD is not. This is owed to CAD-strength, helped in part by strong Oil prices, and this had driven the pair down for a test of the 1.2500 psychological level just last week. This led into a strong bounce but that bullish push couldn’t continue as sellers merely pushed price action back to the Fibonacci level at 1.2622.

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This could set up USD/CAD as an attractive option in the event of USD-weakness, allowing for the incorporation of what’s been a strong Canadian Dollar to go along with a weakening US Dollar. For USD-strength strategies, there may simply be more attractive venues elsewhere at the moment given the strength that’s recently been seen in Oil with has played a role in USD/CAD.

USD/CAD Monthly Price Chart

USDCAD Monthly Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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