USD/CAD Technical Outlook
- USD/CAD up against macro level of resistance
- Scenarios to watch in the days ahead
USD/CAD Technical Outlook: Big Macro Level in Play
USD/CAD is currently up against a big level, the 12950 area has been in play for some time now as a meaningful long-term line of resistance. It dates to prior to the onset of the pandemic when a low was created in December 2019.
The level was later tested as support in November 2020 where it held briefly before quickly turning from old support to new resistance. In December of last year the 12950 area held as resistance and again when we saw a spike and reverse in August that further validated it.
So far we are seeing the level get thoroughly tested. The quick reversal last week only lasted momentarily as USD/CAD is right back on trying to break through. The recent ability to hold a rally without rolling over in any meaningful way is a change in character from what we have been seeing since the middle of the year.
This could be an indication that a breakout to higher levels is very near. There is a wedge developing on the 4-hr chart that could bring in some power, but the caveat to seeing a real breakout is the fact that we are in holiday trading mode, for the most part.
Nevertheless, the ascending wedge could offer up a breakout opportunity. It could trigger higher or lower, so I will follow the break. A trigger higher would have the 12950 level getting cleared and USD/CAD finally out in some open space with room to run.
A trigger lower will once again validate the 12950 a highly influential level that will gain even more weight.
USD/CAD Daily Chart
USD/CAD 4-hr Chart
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX