Downtrend in Question as USD/CAD Remains Stuck Between 2 MAs
USD/CAD turned bearish in early November and has been declining for more than a month, after failing to hold the gains above the resistance zone around 1.39. Buyers were challenging the highs, but the USD weakness resumed and this pair reversed sharply, sending this pair more than 400 pips lower. Despite the decline in crude Oil price which should have pulled the CAD down with it, the CAD has been benefiting from improved risk sentiment, although it has been stuck between 2 moving averages since last week.
USD buyers have been trying to make a comeback this month, but they seem uncertain as we head for the FOMC policy meeting on Wednesday, so USD/CAD remains bearish overall. But the 100 SMA (green) stopped the climb on the H4 chart and rejected the price. Sellers entered again, pushing this pair lower, but the decline stalled at the 50 SMA (yellow). The price has rebounded in the last few hours, so it seems like the rangebound trading will continue.
The strong US non-farm payrolls employment numbers which were released on Friday brought back the debate regarding the future path of the US Federal Reserve’s (Fed) monetary policy and the length of time the central bank wants to keep interest rates at current levels. This boosted the USD on Friday, allowing it to test the psychological threshold of 1.3600 in this pair but we’re not seeing much follow-through today.
USD/CAD Live Chart
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