- The recent “risk off” move this week as we discussed in yesterday’s report here has seen the US Dollar rally against most major currencies with a flight to quality move in Forex markets, with the US currency seen as a safe haven,
- On a separate but connected basis, the Canadian Dollar has weakened recently with the oil price displaying a more negative tone (partly due to the “risk off” scenario).
- For the USDCAD FX rate, this combination of a stronger US Dollar and weaker Canadian Dollar has pushed USDCAD higher, with the currency pair now poised at a key resistance level (see below).
USDCAD bullish shift threat, poised at key 1.3375
A prod higher Tuesday above the important 1.3340 swing resistance, to build on last Friday’s surge through notable resistances at 1.3236/43 and 1.3281/95, to keep risks higher for Wednesday.
The late January plunge below 1.3157 shifted the intermediate-term outlook to bearish, BUT risk is growing again for a shift to neutral above 1.3375.
- We see an upside bias for key 1.3375; break quickly aims for 1.3421, then 1.3474/88.
- But below 1.3323 opens risk down to 1.3272, which we would look to try to hold. Below aims towards 1.3206.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.3000.
- Lower targets would be 1.2912 and 1.2784.
- What Changes This? Above 1,3375 shifts the intermediate-term outlook straight to a bull theme.
4 Hour USD/CAD Chart