USD/CAD has been carving out a range since last July, and given the generally strong USD environment it may be ready to begin a sustainable trend. Recent behavior backs this notion up with price action strengthening.
The area around 12950 up to just over 13000 has been a tough one for USD/CAD to overcome, with the 12950 level having been in play since the end of 2019. There was a brief break in the middle of May, but short-lived before another big swoon lower furthered along the range.
What has transpired in recent weeks has been of interest. Another run tried to develop last month, and while it failed, a low was quickly put in at a much higher level that at any time before. This suggests that resistance is starting to lose its impact and a shift towards higher levels is beginning.
A breakout into the 13100s holds will be key. This will start to get USD/CAD firmly into higher territory outside of the range. If we see this develop soon, a trend towards the 2016 and 2020 highs over 14600 looks like it could be in the works. It seems like a long way from here, but given the high-vol regime we are in it could come much faster than one would expect.
On the flip-side, if we see recent strength give way to selling it will be important to see price hold up above 12819. Otherwise, if that doesn’t hold look for more of the same old range, with a move back towards 12500 or worse developing.
Source : DailyFX