USD/CAD Technical Analysis
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- USD/CAD moving in a sideways pattern, But in a higher level
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USD/CAD Daily Price Chart (Feb 2019 –May 15, 2019)
Consolidating in a Higher Range
On May 6 USD/CAD corrected its upside movement carving out a lower high at 1.3494. Since hitting that high the pair has been moving in a sideways pattern pushing the price to decline towards the levels highlighted in last week’s article on May 10 and creating higher- low at 1.3380 to pull back the same day and close above 1.3410.
On May 13, USD/CAD opened with an upside gap, showing momentum for the price to rally towards the higher end of the trading range and breaking through the levels highlighted in last week article, also price closed above the higher uptrend line on the trend lines fan originated from April 22 low.
Read more in: USD/CAD looking for a break below 1.3376
Meanwhile, Relative Strength Indicator (RSI) on May 13 crossed from below 50 to 57, hinting to a start of an upward momentum.
To Sum up: since March 1 USD/CAD has been stuck in a consolidation zone (1.3286 – 1.3457). The price on April 23 broke higher and started to trade within a higher level (1.3516 – 1.3377) so if the pair remain above 1.3457 the price could push towards the higher end of the trading range at 1.3516. Resistance levels at: 1.3492 and 1.3506 are in focus. If the price closes above 1.3516 the pair could rally towards 1.3550 contingent on clearing the zone 1.3529 – 1.3536.
What if USD/CAD Edges Lower?
If the USD/CAD closes below 1.3457 the pair may swing lower towards 1.3410. Support levels at 1.3443 and 1.3429 need to be watched along the way. If the bearish movements are stronger (closing below 1.3410) it would suggest a decline towards 1.3377 however, support levels at 1.3400 and 1.3388 may be worth monitoring.
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USD/CAD 2 Hours Price Chart (May 15, 2019)
Bearish Potential Below 1.3456
On May 13 USD/CAD printed at 1.3488 – its highest level in 4 days. The price failed in the next day to break above this level, therefore, if the pair break above it would suggest a bullish sentiment towards 1.3506 taking into consideration the resistance level mentioned above.
If the pair fail to break above it would create a third high forming a Triple Top pattern where the neck line residing at 1.3456. USD/CAD needs to clear the supports levels at: 1.3473, 1.3465 and 23.6% Fibonacci retracement at 1.3461 before testing the neckline. If the price breaks and remains below 1.3456 a bearish bias could drive the price towards 1.3425 considering, the support levels mentioned above.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi