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USD/CAD Powering Higher Ahead of Canadian CPI Numbers

Monthly Price Action Suggests Further Upside Ahead The monthly timeframe exhibits scope to explore higher terrain until reaching resistance at C$1.3945, following a rebound from a support zone around C$1.3534. Technically, the pair has been hampered by said resistance since October 2022. However, sellers have been largely unwilling to commit, thus suggesting an eventual breakout to the upside and shining light on another layer of resistance at C$1.4193. Daily Resistance Could Hinder Buying Meanwhile, price action on the daily timeframe shows the unit testing the mettle of resistance coming in at C$1.3795. Beneath here, a decision point area is seen at C$1.3692-C$1.3717, while a break above current resistance could have the currency pair knocking on the door of a resistance zone between C$1.3877 and C$1.3866. Although the monthly timeframe suggests a break above daily resistance is likely, the daily chart’s Relative Strength Index (RSI) has recorded overbought conditions. Shorter-term flow on the H1 timeframe, as you can see, has been working closely with picture-perfect trendline support since the beginning of October (extended from the low of C$1.3472). As of writing, buyers and sellers are squaring off just south of C$1.38 (the figure) and neighbouring resistance at C$1.3810; note also that upside momentum has slowed since last Thursday. H1 Structure is Key While monthly flows suggest further outperformance, the daily timeframe’s resistance at C$1.3795 (and the RSI indicating overbought conditions) may concern buyers. To help determine short-term direction, H1 trendline support and C$1.38 will be key levels to watch. A noteworthy break above the big figure (and C$1.3810 resistance) would imply bullish strength (in line with monthly flow), and continuation moves toward at least H1 resistance from C$1.3848. At the same time, defending H1 resistance and prompting a breakout below the H1 trendline support indicates daily resistance may invite profit-taking and a possible dip to at least H1 support from C$1.3735 or C$1.37 (the figure).

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Publication date:

2024-10-14 16:38:09 (GMT)

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