USD/CAD reaches new 2024 high; could this move continue?
XM Group | Apr 12, 2024 03:31AM ET
- USD/CAD trades higher again, tests strong resistance level
- It is the bulls' first attempt to break above the current trend channel
- Momentum indicators are mixed with a possible bearish divergence developing
USD/CAD is trading higher again today, recording its fourth consecutive green candle and reaching a new 5-month high. USD/CAD is trying to break decisively above the upward sloping trend channel that has been in place since the start of 2024 and it is now testing the resistance set at the 1.3704 level.
Momentum indicators are mostly mixed as only the RSI is sending a strong bullish signal.
The Average Directional Movement Index (ADX) is uninterested in the current movement as it remains stuck below its 25-threshold. More importantly, the stochastic oscillator is edging higher towards its overbought territory, but a divergence is gradually developing. The higher high recorded in USD/CAD is matched with a lower high in the stochastic oscillator and thus opening the door to a bearish divergence.
Should the bulls remain in control of the market, they could try to keep USD/CAD above the December 16, 2022 high at 1.3704 and have a go at staging a rally towards the 1.3807-1.3854 area. If successful, they could then have the chance to test the resistance set by the 2023 high at 1.3898.
On the flip side, the bears are trying to stop the current advance. They could firstly try to push USD/CAD back inside the trend channel and then attempt a sell-off towards the 23.6% Fibonacci retracement of the April 5, 2022 – October 13, 2022 uptrend at 1.3605 level.
To sum up, USD/CAD bulls are trying to take advantage of the current dollar-positive market momentum, but they need a strong move higher in order to establish their dominance in this pair and record another 2024 high.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.