Title: In-Depth Technical Analysis of USD/CAD: Uptrend Persists Amidst Key Resistance and Support Levels
Author credit: Based on information by Greg Michalowski via InvestingLive.com
As of late November 2024, the USD/CAD currency pair continues to trade on an upward trajectory, gaining fresh momentum in recent sessions. Driven by a dynamic interplay of fundamental and technical factors, the pair has rallied against the Canadian dollar, showcasing a bullish structural pattern across multiple timeframes. The price movement has been responsive to not only monetary policy shifts by the Federal Reserve and the Bank of Canada, but also fluctuations in key commodity prices like crude oil, which significantly impacts the Canadian economy.
This technical overview will examine the current price action, evaluate support and resistance levels, and analyze the key indicators that are shaping short- to medium-term USD/CAD trends.
USD/CAD Key Highlights:
– The pair traded to a high of 1.37298 in early Friday sessions.
– This marked a shift from earlier week lows and represented a consistent rise stemming from a recent low of 1.3640.
– A broader analysis highlights a reinforcing bullish structure, particularly when viewed on the daily chart.
– Price remains above key moving averages (50- and 100-day MA), suggesting sustained upside momentum.
– Upcoming economic data releases from Canada and the US are likely to serve as catalysts for continued volatility.
Short-Term Technical Analysis
The USD/CAD is asserting a bullish tone amid favorable technical patterns, recovering after a dip earlier this month. Using the H1 and H4 charts, price action reflects a series of higher lows and slightly higher highs, suggesting increasing bullish interest as buyers continue to enter at support levels.
Key levels observed:
– Intraday high at 1.37298 today sets a short-term ceiling.
– First level of support sits around 1.3700, a psychological round number and a pivot area that frequently acts as support/resistance.
– Further support lies at 1.3686. This level aligns closely with hourly moving average lines, offering technical reinforcement.
– A push above today’s highs could pave the way toward mid-term resistance at 1.3745, followed by monthly highs near 1.3784.
On the hourly chart, the market remains broadly constructive as long as price stays above 1.3680–1.3685 zone, which is where the 100- and 200-hour moving averages are currently converging.
Intermediate and Long-Term Technical Picture
The daily chart provides a clean view of the broader rising trend. USD/CAD has continued its march upward from its October lows buoyed by more dovish sentiment in Canada and rising US Treasury yields. Several aspects from the daily technical chart include:
– The 100-day moving average (around 1.3520) and the 50-day moving average (around 1.3620) both offer bullish confirmation, with the price trading well above both markers.
– The pair failed to breach the 1.3800 resistance level last month, leading to a slight correction, but renewed buying interest from 1.3610 supported a credible bounce.
– Momentum indicators like RSI and MACD suggest a potential for more gains, but are nearing overbought territory, advising caution in short-term positioning.
Support and Resistance Levels
Here are the current support and resistance targets that traders should monitor closely this week:
Support:
– 1.3700 – Round number and recent inflection point.
– 1.3685 – Area of hourly moving average confluence.
– 1.3640 – Recent swing low that offered a strong bounce.
– 1.3610 – A key level during the last correction, potential lower support if trend reverses.
Resistance:
– 1.3730 – Today’s session high before minor pullback.
– 1.3745 – Static resistance from early November tops.
– 1.3784 – Monthly high and critical ceiling
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