USD/CAD is seeing a robust begin to the yr after shedding a lot of floor in late December!
How excessive can USD/CAD fly earlier than it catches the eye of sufficient U.S. greenback bears?
We’re taking a more in-depth take a look at a possible resistance zone which may rain on the bulls’ parade this week.
USD/CAD 4-hour Foreign exchange Chart by TradingView
In case you missed it, the U.S. greenback wrapped up Tuesday greater as merchants largely brushed apart weak U.S. main indicators and leaned into the concept the U.S. financial system remains to be holding up higher than most of its friends.
The Canadian greenback, however, didn’t get the identical love. Falling oil costs have been a headwind, and the noise round potential U.S. army motion in strategic territories like Greenland (and possibly Canada?) has added one other layer of stress.
Do not forget that directional biases and volatility circumstances in market value are usually pushed by fundamentals. For those who haven’t but finished your fundie homework on the U.S. greenback and the Canadian greenback, then it’s time to take a look at the financial calendar and keep up to date on each day basic information!
USD/CAD took a beating into the ultimate weeks of December, however the promoting lastly ran out of steam close to 1.3640. Since then, the pair has bounced and is now buying and selling again above the 1.3800 psychological degree.
That space is doing plenty of technical work. Present costs line up with former pattern line assist from the second half of 2025 that has since flipped, and so they additionally sit close to the 38.2% Fibonacci retracement of December’s slide. The 200 SMA on the 4-hour chart is shut by, too, giving merchants lots to consider.
If USD/CAD runs into resistance right here and rolls over, the December down transfer might simply reassert itself. That might put 1.3700 again in play, with a deeper pullback opening the door to a retest of the 1.3640 lows.
On the upside, if greenback bulls preserve management and push by, a sustained transfer above 1.3900 would change the tone. From there, a run towards the 1.4000 psychological degree wouldn’t be a stretch in any respect.
Whichever bias you find yourself buying and selling, don’t overlook to apply correct danger administration and keep conscious of top-tier catalysts that might affect general market sentiment.
Disclaimer:
Please remember that the technical evaluation content material supplied herein is for informational and academic functions solely. It shouldn’t be construed as buying and selling recommendation or a suggestion of any particular directional bias. Technical evaluation is only one facet of a complete buying and selling technique. The technical setups mentioned are meant to focus on potential areas of curiosity that different merchants could also be observing. In the end, all buying and selling selections, danger administration methods, and their ensuing outcomes are the only real duty of every particular person dealer. Please commerce responsibly.