. USD/CAD remains stable above the mid-1.3700s, hovering close to its highest level since early May

USD/CAD Technical Analysis: Bullish Signals and Key Levels to Watch

USD/CAD Technical Analysis: Bullish Signals and Key Levels to Watch

10 Jun 2024

USD/CAD remains stable above the mid-1.3700s, hovering close to its highest level since early May

FUNDAMENTAL OVERVIEW:

  • USD/CAD moves within a tight range, impacted by various conflicting factors.
  • Following the positive US Nonfarm Payrolls data, traders reduced their expectations of a September Fed rate cut, strengthening the USD.
  • Conversely, rising Crude Oil prices support the Canadian dollar, limiting additional gains for the pair.

The USD/CAD pair fails to benefit from the post-NFP upward momentum fully and fluctuates with modest gains or losses, hovering slightly above the mid-1.3700s during Monday’s Asian session. This muted price activity reflects a blend of conflicting influences, although the overall fundamental context appears to favor bullish traders.

The US Dollar (USD) rose to its highest level in almost four weeks as anticipation grows that the Federal Reserve (Fed) will maintain higher interest rates for an extended period due to the ongoing strength of the US economy, reinforced by the robust US jobs report released on Friday. Concurrently, optimistic speculations support increased US Treasury bond yields, which, combined with a prudent market sentiment, provides support for both the safe-haven US Dollar and the USD/CAD pair.

The latest US consumer inflation figures are upcoming on Wednesday, closely trailed by the much-awaited FOMC monetary policy decision outcome. These events will aid investors in gauging when the Fed might commence its rate-cutting measures, thereby impacting the trajectory of the USD. Additionally, speculation regarding another rate cut by the Bank of Canada (BoC) next month could further support the USD/CAD pair.

USD/CAD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

USD/CAD is trading within an up channel.

USD/CAD is moving above all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.

Immediate Resistance level: 1.3766

Immediate support level: 1.3739

HOW TO TRADE USD/CAD

After a sharp rise, USD/CAD began consolidating within a range. The bulls are currently showing strength, driving the price aggressively upward. It is now trading around a major resistance zone, and if this zone is breached, further gains can be anticipated.

TRADE SUGGESTION- STOP BUY– 1.3781, TAKE PROFIT AT- 1.3830, SL AT- 1.3751.