Will buyers be dealt yet another blow?
Price is now leaning against the trendline support that has helped to keep the upwards momentum on track for USD/CAD since October. A break below that will be a serious blow to buyers’ confidence and conviction and will open up a move towards testing 1.3320 and then support from 1.3290-00.
The dollar is experiencing a tough time across the board but less so against the loonie to start the day. I reckon the technical level above has something to do with that as buyers are putting up a defense at that level.
Oil is up by 1.8% on the day currently so that will continue to keep downwards pressure on the pair alongside dollar weakness following Fed chair Powell’s dovish remarks on Friday. Let’s see if sellers can find a way to break the upside momentum and open up an extended range for the pair in the session ahead.
For now, risk levels can be easily defined and limited if you’re looking to trade that break or counter-trade it as well. Always remember one of the simpler rules in trading: Risk a little to make more than a little.