The Canadian dollar extends its fall. After some consolidating and hesitation, Dollar/CAD continues to the upside. There are three reasons behind the recent pressure on the loonie: Trump’s trade wars, worries about Canadian housing and oil.
USD/CAD currently trades at 1.3740. The pair has strong momentum after making the break. What levels should we look out for?
1.38 is the immediate level of resistance. It is not only a round number but also where the pair found support in late 2015 and early 2016. 1.3855 is the next hurdle: it capped the pair on its way down in the Spring of 2016.
1.40 is the next resistance. It is marked as a target by several banks. In addition, it is the high point in December 2015 and a round number of course. Is Dollar/CAD ready to attack this level? We would probably need oil prices to continue sliding. The inventory report could provide the excuse.
Above 1.40, we are dealing with levels seen only for a short period of time in early 2016. 1.4325 served as resistance as the pair attempted a recovery after falling from the peak. And that peak is the ultimate goal: 1.47. As the chart demonstrates, trading at such highs did not last too long.
On the downside, we find a crowded net of support line: 1.3640, 1.36, 1.3540 and 1.3460 all worked as lines of support and resistance in recent weeks.
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