USD/CAD Testing Major Support Level, Strong Challenge For Bulls
Dwayne Buzzell | Mar 26, 2018 06:42AM ET
There has been a strong bullish rally in the USD/CAD pair after it hit the critical support level at 1.22447.From that level, the bulls have taken control of the market and secured a new high at 1.31210.Most of the professional investors have already closed their long orders after the bulls failed to breach the major resistance level at 1.131210.Prior to the closing of the last trading week, the pair had found some decent support at 1.28250.The professional price action traders have already gone long in the USD/CAD pair after the formation of tweezers bottom in the daily chart.
The price of oil is also facing an extreme level of bearish threat due to excessive supply in the global industry. However, most of the leading investors are expecting another drastic action from OPEC to minimize the ongoing energy crisis. Unless we have a major announcement, it’s hard for the oil bulls to take control of the market. Canada is one of the major oil producing country in the world and the significant surge in the price of oil will boost the Canadian dollar in the global market. This will eventually create strong bearish pressure to the USD/CAD pair.
USD/CAD daily chart analysis
Figure: USD/CAD testing critical support level in the daily chart
From the above figure, you can clearly see the formation of tweezers bottom at the major support level at 1.28929.A daily closing of the price above the minor resistance level at 1.29464 will confirm temporary bottom formation at 1.28929.This will eventually lead this pair towards the next major resistance level at 1.31210.Most of the leading investors in the CFD trading industry will cautiously observe this level since a daily closing of the price above this level will confirm the end of bearish retracement of the medium term bullish trend. This will boost the USD/CAD pair towards the next major resistance level at 1.32909.
On the downside, we need to break below the low of 22nd March 2018 to see some fresh selling pressure in this pair. A clear break below the critical support level at 1.28300 will refuels the USD/CAD bears in the global market. This will eventually lead this pair towards the next major support level at 1.26794.This level is going to provide strong support to this pair as we have 100 and 200 days SMA. We might see some decent bullish bounce near the critical support level at 1.26760.Any bullish price action confirmation signal will be an excellent opportunity to execute fresh long orders. However, the optimistic bulls are a little bit cautious about the bearish crossover of the 100 and 200 days SMA. The pair needs to break above the minor resistance level at 1.29193 to eliminate the current bearish threat. In the weekly chart, the overall bias for the USD/CAD pair is extremely bullish as we have a clear break of the 100 weekly SMA. The conservative traders are considering this recent downfall as a bearish retracement. Cautious traders are advised to look for potential bullish price action confirmation signal near the major support level to execute fresh long orders. On the contrary in the absence of definite bearish reversal signal, we have no interest in selling this pair.
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Fundamentally the price of crude is facing a bearish threat at the current moment. This week has no such high impact news which will help the oil bulls to surge in the global market.Considering the fundamental and technical factors, we have no interest in selling this pair. It’s better to wait on the sideline and look for clear bullish price action signal to execute fresh long.
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