Further US Dollar gains sets up USDCAD for a bullish shift

  • 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.

For Today:

  • 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

usd/cad chart


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Current Market Analysis
Euro breaks down, GBPCAD threatens upside

US Dollar Index holds support and rebounds EURUSD seeds multiple negative signals, downside risks GBPUSD sends buy signal GBPCAD sets up more bullish AUDUSD negative and USDCAD buy signal USDTRY and USDBRL surge

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