USD/CAD is making a run for it as risk sours, oil slides
The stars are aligning for a significant climb in USD/CAD to take place here. Yesterday, we had the dovish Bank of Canada which helped price climb above the 76.4 retracement level but ultimately the daily close fell short of holding above 1.3384. However, with risk sentiment still sour today it’s putting pressure on commodity currencies and with oil dipping after OPEC is seen to be eyeing minimal production cuts, price is looking for a break above the key resistance level.
Hold a break above that and the next resistance level will be 1.3500 followed by minor swing region resistance around 1.3540-50. Beyond that, it’s clear sailing until a move to the May 2017 high @ 1.3793.
The 76.4 retracement level has proven to be a key resistance level in the past but if buyers can hold a firm break above it, the technical picture will start flowing alongside the fundamental picture and that is rather pleasing if you’re a trader. However, when trades are this well aligned the fear is that it can get crowded rather quickly and that’s where there could be a danger of a squeeze happening. So, just watch out for that.
But for now, this break here looks to signal an extension to the bullish momentum seen over the past three days.