Canadian Dollar – USD/CAD Snaps Back to Key Support

Canadian Dollar, USD/CAD Talking Points:

The USD / CAD pair peaked on Monday in September, with prices returning to more than 200 pips in the main support area yesterday. The USD / CAD pair is currently stabilizing at the same level of 1.2631 that hit its lowest point last Friday. The article analysis is based on price action and chart form.

Earlier this week, the USD / CAD pair surged to its September high, causing a stir, threatening to test previous 2021 highs of 1.2950 and could even retest the psychological level of 1.3000. The reversal was reversed on Monday lunchtime and prices moved higher and lower from the support I had seen earlier. We’re now at the last support station we looked at and it’s great because it’s the same price that’s been available since January.

The corresponding prices are 1.2621 and 1.2631. The latter is the 23.6 Fibonacci retracement of short selling from 2020-2021, while the former shows 50 of the long-term move between 2002-2007. Together these prices form an adjacent area that has been very active as support and resistance over the last month.

USD/CAD Four-Hour Price Chart

USDCAD Four Hour Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview

USD/CAD Bigger Picture

The recent move in the USD / CAD pair is a good reflection of the move in the US dollar as the price appreciation eased earlier in the week as the FOMC accelerated. But price action is price action, and there are only two options right now for traders looking to develop a USD / CAD strategy. Given the downward pressure on offer support from buyers, range scenarios are still possible, aiming for a rise to 1.2700 or maybe even 1.2750.

On the downside of this pair, there is the possibility of failure by retesting the good support area. The psychological level of 1.2500 is below the interesting price and this price helps determine the lowest monthly and September levels for this pair. It is also hovering around 1.2578 which could be used as a tighter support area before the 1.2500 level returns.

USD/CAD Hourly Price Chart

USDCAD Hourly Price Chart

Chart prepared by James Stanley; USDCAD on Tradingview