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US Dollar Loses Steam at 1.28 against the Loonie

US dollar

Looking at the US dollar on the above four hour MT 4 price action chart, the benchmark USD/CAD currency exchange rate is trying to extend last week’s rally but coming up short. This recovery started at the multi-year low price point.

The US dollar was rejected at 1.28 and is now falling lower against the Canadian dollar (CAD). The two hundred (200) hour simple moving average is also capping gains in the USD/CAD Forex market as is the falling trend line from the middle of November.

Canada is releasing monthly manufacturing sales data as well as monthly wholesales data. Other than that there is not a lot to impact the price action of the US dollar (USD). Tomorrow, President-elect Joe Biden will be. Trump plans to issue one hundred (100) presidential pardons and commutations. However, not one for himself or any member of his family.

Trump also has no plans to attend Biden’s inauguration. He will also not meet with new President of the United. He will leave the Whitehouse before Joe Biden is sworn in for Florida where he reside at Mara Lago.

Germany will release their monthly private ZEW economic survey as well as their final monthly consumer price index (CPI). The Eurozone will also publish their monthly private ZEW economic survey and Italy will publish their monthly trade balance.

Daily US Dollar Technical Analysis (USD/CAD)

Looking at the technical indicators, they are gaining some bullish momentum but not confirming this upside bias on the daily USD/CAD chart. Forex traders should be cautious as the bears still have some strength.

 A daily close above 1.28 is needed to confirm that the USD/CAD Forex market has found a short-term bottom. This would be a good signal for the bulls to enter. The next upside barrier lines up at 1.2835 with the key upside pivot lining up at 1.29 then coming into play. The next layer of resistance lines up at 1.2955 then the key barrier of 1.30 comes into focus.

On the downside, there is a congestion zone in play at 1.2740 to 1.2735. A daily close below this area brings the key round number at 1.27 into play. The next downside congestion zone lines up at 1.2670 to 1.2665.  

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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