Search ForexCrunch

USD/CAD  posted modest gains last week, as the pair closed just above the 1.07 line. This marked the first time the pair has closed the trading week above 1.07 in over four years. There are no releases this week,  as we begin 2014 on a quiet note. Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

The only Canadian release this week, GDP, beat the estimate  for a third straight month.  In the US,  strong Unemployment Claims and New Home  Sales releases helped the US dollar gain ground late in the  week at the expense of the Canadian currency.

[do action=”autoupdate” tag=”USDCADUpdate”/]

USD/CAD daily chart with support and resistance lines on it. Click to enlarge:   USD CAD Forecast Dec. 30-Jan.3

 

USD/CAD Technical Analysis

USD/CAD opened the week at 1.0643 and  touched a low of 1.0582. The pair then reversed directions,  and  pushed above the 1.07 line for the second week in a row. USD/CAD touched  a high of  1.0718, as  resistance at 1.0723  (discussed last week) held firm. The pair closed the week at 1.0703.

Live chart of USD/CAD: [do action=”tradingviews” pair=”USDCAD” interval=”60″/]

 

Technical lines, from top to bottom:

We  start with resistance at 1.1219. This line has remained intact since  July 2009, when the Canadian dollar showed sharp volatility, trading as high as the 1.17 level. This is followed by resistance at 1.1124.

The next resistance line is 1.0945,  which is protecting the key 1.10 level. This line has not been tested since September 2009.

Next is resistance at 1.0853. This line has held firm since May 2010.

1.0723 was a cap in mid-2010, before the US dollar tumbled and dropped all the way into 0.93 territory. This line faced pressure for the third straight week. The pair was unable to break through and this line remains in a resistance role, albeit a weak one.

1.0660 has  had a busy December  and was  easily breached by the pair.  It has reverted to a support line.

1.0523 was a peak back in November 2011. This line has some breathing room as the USD/CAD trades at higher levels.

1.0446 has held since mid-November, when the US dollar continued a rally which saw it break above the 1.07 line.

1.0340 had a busy October and is providing strong support. 1.0250 is next. This line has held firm since mid-September.

1.0180 provided support for the pair during March, and saw a lot of activity in the first half of June. It remains a strong support line.

The final support line is  at 1.01. It was a trough back in July 2012 and switched to resistance afterwards. The line proved its strength several times in 2013, most recently in mid-May.

 

I am  bullish on USD/CAD

The Canadian dollar remains under pressure as USD/CAD begins the week above the 1.07 line. With further QE tapers expected  early in 2014, we could see the US dollar  continue to strengthen.

Further reading: