USD/CAD Forecast April 25, 2013, Technical Analysis

The USD/CAD currency pair fell during the session on Wednesday, but as you can see has remained in a fairly tight range for the last couple of weeks. As we look at this chart, we cannot help but notice that the 1.0250 level seems to be the epicenter of the recent action, and as a result we think the market is simply trying to take a rest after the nice bullish move that we had from the 1.01 level.

We now see the 1.03 level as the resistance that needs to be overcome in order for the buyers to take over again. This will more than likely be predicated upon something going on in the oil markets, and as a result we will have to watch both markets simultaneously. After all, the Canadian dollar does well when oil dollars, and poorly when it doesn’t do so well. Of course, this doesn’t always have to be 100% true, there are other factors driving currencies after all. However, it is a nice general rule to pay attention to.

Looking at this chart, if we managed to breakdown at this point time, we think that the 1.02 level will offer support. It isn’t until we get below that level that we have to start thinking about shorting the market again. If we do manage to get below the 1.01 level, we think that would be a very poor signs of this marketplace, and it would continue to grind much lower from that level. On the other hand, if we did get that bullish signal above the 1.03 level, we think that this market could test the 1.04 level for resistance, and if he gets above there we could be heading as high as 1.10 before the move is all said and done.

At this moment time though, the market seems like it’s winding up for some type of bigger move. That is the nature of this marketplace, as the two economies are so intertwined, the currency pair tends to do nothing for weeks on end, and then all of a sudden taking off in one direction or the other. It appears that is what we’re trying to do at the moment.


USD /CAD Forecast April 25, 2013, Technical Analysis

Written by FX Empire