Daily Trade Ideas

USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Dec 10, 2024
Usdcad

Daily Price Outlook

- Pivot-Based Outlook: Bearish bias below $1.41888; support at $1.41456 and $1.41004.

- Resistance Levels: Immediate resistance at $1.42266; stronger barriers at $1.42657.

- Momentum Indicators: RSI at 64 indicates strong momentum but nearing overbought conditions.

The USD/CAD pair is trading at $1.4174, down 0.01%, as price action consolidates just below its pivot point at $1.41888.

The pair is exhibiting a cautious bearish tone, reflecting mixed sentiment as traders assess near-term catalysts, including broader dollar strength and oil price fluctuations, which directly influence the Canadian dollar.

The RSI at 64 signals strong momentum but suggests the pair is approaching overbought territory, potentially capping further upside.

Immediate resistance is observed at $1.42266, with additional levels at $1.42657, highlighting significant barriers for bullish advances.

On the downside, immediate support lies at $1.41456, with further safety nets at $1.41004 and $1.40660. A decisive break below the $1.41456 level could signal a continuation of bearish momentum, targeting deeper retracements.

Technical indicators support a cautious outlook. The 50-day EMA at $1.40959 aligns closely with support levels, providing a key reference for potential pullbacks.

If the pair sustains trading below the pivot, bearish pressure could intensify, targeting the $1.41409 region. Conversely, a break above $1.41888 could shift sentiment to the upside, opening the door to retest $1.42266 and higher levels.

Traders are advised to monitor the $1.41841 level for entry opportunities. Selling below this threshold with a target of $1.41409 and a stop-loss at $1.42178 aligns with the current technical landscape, offering a favorable risk-reward setup.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD - Trade Ideas

Entry Price – Sell Below 1.41841

Take Profit – 1.41409

Stop Loss – 1.42178

Risk to Reward – 1: 1.2

Profit & Loss Per Standard Lot = +$432/ -$337

Profit & Loss Per Mini Lot = +$43/ -$33

USD /CAD

Technical Analysis

USD/CAD Price Analysis – Dec 10, 2024

By LonghornFX Technical Analysis
Dec 10, 2024
Usdcad

Daily Price Outlook

During the European trading session on Tuesday, the USD/CAD currency pair continued its upward momentum, reaching a fresh four-year high of 1.4200.

However, the reason for its upward trend could be linked to the bullish US Dollar, which saw gains ahead of the release of the highly anticipated US Consumer Price Index (CPI) data for November, scheduled for Wednesday.

At the same time, the Canadian Dollar (CAD) faced ongoing pressure, further weakened by investor expectations that the Bank of Canada (BoC) could announce another interest rate cut.

Many are forecasting a 50-basis-point reduction, potentially lowering the rate to 3.25% in the upcoming monetary policy meeting on Wednesday. This outlook for the BoC has kept sentiment around the CAD cautious, as traders brace for the possibility of a more dovish stance from the central bank.

US Dollar Strengthens Ahead of CPI Data, Impacting USD/CAD Outlook

On the US front, the broad-based US Dollar strengthened ahead of the release of the US Consumer Price Index (CPI) data for November, which will be published on Wednesday.

The US Dollar Index (DXY), which tracks the Greenback against six major currencies, hit a two-day high of 106.35. The upcoming inflation data is expected to play a big role in shaping market expectations for the Federal Reserve’s (Fed) interest rate decisions.

Investors are anticipating that the Fed will cut its key borrowing rates by 25 basis points, bringing them to a range of 4.25%-4.50% at its next policy meeting on December 18, according to the CME FedWatch tool.

Economists predict that the annual headline inflation will rise to 2.7% from 2.6% in October, while the core CPI, which excludes food and energy prices, is expected to increase by 3.3%. On a month-to-month basis, headline and core CPI are projected to rise by 0.2% and 0.3%, respectively.

If the inflation data shows signs of slowing down, it could lead to more bets on a dovish Federal Reserve, meaning more rate cuts. On the other hand, if inflation remains high, it could reduce these expectations, keeping the Fed’s rate cut plans in question.

Therefore, the inflation data will likely impact the USD/CAD pair, with signs of slowing inflation boosting expectations for a Fed rate cut, strengthening the USD. Conversely, higher inflation could weaken these expectations, potentially limiting the USD’s strength against the CAD.

Weak Outlook for the Canadian Dollar as Investors Anticipate BoC Rate Cut

On the other hand, the outlook for the Canadian Dollar (CAD) remains weak as investors expect the Bank of Canada (BoC) to cut interest rates by 50 basis points to 3.25% in its upcoming meeting on Wednesday.

This expectation is driven by the current economic conditions in Canada, where the BoC is focusing on maintaining a balanced economy.

The Canadian labor market has shown a significantly lower unemployment rate, and inflation pressures are staying within the BoC's target of 2%. These factors have led to expectations that the BoC might adopt a more dovish stance, potentially lowering interest rates to support growth.

If the BoC follows through with a rate cut, it could further weaken the CAD, making the currency less attractive to investors compared to the US Dollar.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD – Technical Analysis

The USD/CAD pair is trading at $1.4174, down 0.01%, as price action consolidates just below its pivot point at $1.41888.

The pair is exhibiting a cautious bearish tone, reflecting mixed sentiment as traders assess near-term catalysts, including broader dollar strength and oil price fluctuations, which directly influence the Canadian dollar.

The RSI at 64 signals strong momentum but suggests the pair is approaching overbought territory, potentially capping further upside.

Immediate resistance is observed at $1.42266, with additional levels at $1.42657, highlighting significant barriers for bullish advances.

On the downside, immediate support lies at $1.41456, with further safety nets at $1.41004 and $1.40660. A decisive break below the $1.41456 level could signal a continuation of bearish momentum, targeting deeper retracements.

Technical indicators support a cautious outlook. The 50-day EMA at $1.40959 aligns closely with support levels, providing a key reference for potential pullbacks.

If the pair sustains trading below the pivot, bearish pressure could intensify, targeting the $1.41409 region. Conversely, a break above $1.41888 could shift sentiment to the upside, opening the door to retest $1.42266 and higher levels.

Traders are advised to monitor the $1.41841 level for entry opportunities. Selling below this threshold with a target of $1.41409 and a stop-loss at $1.42178 aligns with the current technical landscape, offering a favorable risk-reward setup.

Related News

- GOLD Price Analysis – Dec 10, 2024

- AUD/USD Price Analysis – Dec 10, 2024

- USD/CAD Price Analysis – Dec 03, 2024

USD /CAD

Technical Analysis

USD/CAD Price Analysis – Dec 03, 2024

By LonghornFX Technical Analysis
Dec 3, 2024
Usdcad

Daily Price Outlook

During the European trading session, the USD/CAD currency pair continued its bearish trend, remaining under pressure around the 1.4040 level, even hitting an intraday low of 1.4010.

This downward movement was largely driven by a weakening US dollar, which has been losing momentum amid growing expectations that the Federal Reserve could cut rates in December.

On top of that, speculation that OPEC+ may delay its plans to boost oil production has been supporting crude prices for a second consecutive day.

This, combined with a reduced likelihood of a significant rate cut by the Bank of Canada (BoC) in December, is weighing on the Canadian Dollar, further pressuring the USD/CAD pair.

Geopolitical Risks, Oil Prices, and US Economic Data Influence USD/CAD Movement

Despite a ceasefire deal between Israel and the Lebanon-based Hezbollah militant group, the geopolitical risk premium remains high due to the ongoing Russia-Ukraine conflict. This uncertainty continues to weigh on global markets.

At the same time, expectations that OPEC+ will delay plans to increase oil production are providing support to crude oil prices for a second consecutive day.

This, coupled with reduced expectations for a large rate cut by the Bank of Canada (BoC) in December, is putting pressure on the Canadian Dollar (CAD), which is a commodity-linked currency. As a result, the USD/CAD pair is seeing some downward pressure.

Meanwhile, the US Dollar Index (DXY), which tracks the greenback against a basket of currencies, is struggling to build on its recent bounce from a nearly three-week low.

The increased likelihood of the Federal Reserve cutting rates in December has weakened the dollar. However, investors are betting that US President-elect Donald Trump's expansionary policies could lead to higher inflation, prompting the Fed to keep rates higher for longer. This provides some support to US bond yields and, in turn, the USD.

Looking ahead, traders will focus on the release of the US JOLTS Job Openings data later today, which could offer short-term trading opportunities.

Meanwhile, the US economic data this week, including the Nonfarm Payrolls (NFP) report and Fed Chair Jerome Powell’s speech, will likely influence expectations for US interest rates. The outcome of Thursday's OPEC+ meeting will also be crucial for oil prices and could impact the USD/CAD pair.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD – Technical Analysis

USD/CAD remains steady at $1.4058, registering minimal change for the session (-0.00%). The pair hovers just below the pivot point at $1.40893, reflecting indecision as the market consolidates after recent gains.

The 4-hour chart shows price action closely aligned with the 50 EMA at $1.40264, suggesting a delicate balance between bullish and bearish forces.

Immediate resistance is at $1.41291, a level that aligns with the upper end of the current range. A break above this resistance could push the pair toward $1.41776, a key psychological barrier.

On the downside, immediate support at $1.40242 is critical; a breach would likely expose $1.39821, with further declines potentially targeting $1.39489. The RSI stands at 54, indicating mild bullish momentum but no significant overbought or oversold conditions.

The technical landscape favors a cautious bearish bias, particularly if prices fail to reclaim the pivot level. A recommended trade strategy is to sell below $1.40584, targeting $1.40019 as the take-profit level, with a prudent stop-loss at $1.41090.

This setup leverages the pair's proximity to the 50 EMA and aligns with its recent inability to sustain a clear breakout.

Related News

- GOLD Price Analysis – Dec 03, 2024

- AUD/USD Price Analysis – Dec 03, 2024

- USD/CAD Price Analysis – Nov 26, 2024

USD /CAD

Daily Trade Ideas

USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Dec 3, 2024
Usdcad

Daily Price Outlook

- Support and Resistance: Immediate resistance at $1.41291, while critical support lies at $1.40242 and $1.39821.

- Trend Indicators: Price near the 50 EMA ($1.40264); RSI at 54 reflects mild bullish bias without extremes.

- Trade Setup: Sell below $1.40584, targeting $1.40019 with a stop-loss at $1.41090.

USD/CAD remains steady at $1.4058, registering minimal change for the session (-0.00%). The pair hovers just below the pivot point at $1.40893, reflecting indecision as the market consolidates after recent gains.

The 4-hour chart shows price action closely aligned with the 50 EMA at $1.40264, suggesting a delicate balance between bullish and bearish forces.

Immediate resistance is at $1.41291, a level that aligns with the upper end of the current range. A break above this resistance could push the pair toward $1.41776, a key psychological barrier.

On the downside, immediate support at $1.40242 is critical; a breach would likely expose $1.39821, with further declines potentially targeting $1.39489. The RSI stands at 54, indicating mild bullish momentum but no significant overbought or oversold conditions.

The technical landscape favors a cautious bearish bias, particularly if prices fail to reclaim the pivot level. A recommended trade strategy is to sell below $1.40584, targeting $1.40019 as the take-profit level, with a prudent stop-loss at $1.41090.

This setup leverages the pair's proximity to the 50 EMA and aligns with its recent inability to sustain a clear breakout.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD - Trade Ideas

Entry Price – Sell Below 1.40584

Take Profit – 1.40019

Stop Loss – 1.41090

Risk to Reward – 1: 1.12

Profit & Loss Per Standard Lot = +$565 -$506

Profit & Loss Per Mini Lot = +$56/ -$50

USD /CAD

Daily Trade Ideas

USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Nov 26, 2024
Usdcad

Daily Price Outlook

- Bullish Momentum: USD/CAD climbs above the pivot point at $1.41776, signaling upside potential.

- Resistance Levels: Immediate resistance at $1.42147, with the next target at $1.42513.

- Overbought Risk: RSI at 67 hints at possible short-term corrections.

USD/CAD is trading at $1.41054, up 0.86%, as the pair continues to build on bullish momentum, testing key resistance near $1.41191. The pair remains above its pivot point at $1.41776, signaling the potential for further upside if buyers sustain control. Immediate resistance is located at $1.42147, with additional barriers at $1.42513.

On the downside, immediate support lies at $1.40828, followed by stronger levels at $1.40531 and $1.40242, where buyers may look to re-enter if the pair retraces. The 50-day EMA, currently at $1.39861, serves as a dynamic support, reinforcing the upward trajectory.

The RSI at 67 suggests the pair is nearing overbought territory, which could trigger profit-taking in the short term. A break below $1.41198 may expose USD/CAD to a corrective pullback toward the $1.40531 support. Conversely, a sustained break above $1.41776 could pave the way for a rally toward $1.42147 and beyond.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD - Trade Ideas

Entry Price – Sell Below 1.41198

Take Profit – 1.40531

Stop Loss – 1.41698

Risk to Reward – 1: 1.3

Profit & Loss Per Standard Lot = +$667/ -$500

Profit & Loss Per Mini Lot = +$66/ -$50

USD /CAD

Technical Analysis

USD/CAD Price Analysis – Nov 26, 2024

By LonghornFX Technical Analysis
Nov 26, 2024
Usdcad

Daily Price Outlook

Despite the US Dollar bearish bias, the USD/CAD pair has continued to rise, trading around 1.4090, with an intra-day high of 1.4178.

However, the upward trend can be largely attributed to market uncertainty sparked by President-elect Donald Trump's announcement of a 25% tariff on imports from Mexico and Canada, along with a 10% increase in tariffs on Chinese goods entering the US.

These developments weighed heavily on the Canadian Dollar, which is sensitive to risk, pushing the USD/CAD higher.

Moreover, weaker oil prices are adding pressure on the CAD as Canada is the largest oil exporter to the US, its currency often moves in line with oil price changes. When crude prices drop, the CAD tends to weaken, further fueling the rise in USD/CAD.

USD/CAD Surges Amid Tariff Concerns and Falling Oil Prices

However, the global market sentiment has been flashing red as market uncertainty increased following President-elect Donald Trump's announcement of a 25% tariff on imports from Mexico and Canada, along with a 10% increase in tariffs on Chinese goods entering the US.

This news has weakened market sentiment, putting pressure on the Canadian Dollar (CAD), which is sensitive to such risk factors.

US President-elect Donald Trump and Canadian Prime Minister Justin Trudeau had a positive talk on trade and border security on Monday night. While the conversation was seen as constructive, Canada’s Deputy Prime Minister did not mention Trump’s threat of tariffs.

She stressed that the Canada-US relationship is balanced and beneficial, especially for American workers, but the threat of tariffs is still affecting market sentiment.

On the other hand, the weaker crude oil prices are adding pressure on the CAD. As Canada is the largest oil exporter to the US, the value of the Canadian Dollar often moves in sync with oil price changes. At the time of writing, West Texas Intermediate (WTI) oil is trading around $69.00.

The decline in oil prices follows reports of a potential resolution to the Israel-Hezbollah conflict, easing geopolitical tensions and further contributing to the drop in oil prices, which typically weakens the CAD.

Therefore, the combination of tariff concerns and falling oil prices is putting downward pressure on the Canadian Dollar, leading to a continued rise in the USD/CAD pair. This allows the USD to strengthen against the CAD, pushing the pair higher.

USD Faces Pressure Amid Fed's Rate Cut Comments, but Strong PMI Data Provides Stability

On the US front, the US Dollar (USD) is facing pressure after comments from Federal Reserve (Fed) officials on Tuesday. Federal Reserve Bank of Chicago President Austan Goolsbee suggested that the Fed is likely to continue lowering interest rates to a neutral level, which neither stimulates nor restricts economic activity.

Meanwhile, Minneapolis Fed President Neel Kashkari mentioned that it might be appropriate to consider another rate cut at the Fed's meeting in December, according to Bloomberg.

Despite these dovish signals, the declines in the US dollar could be short-lived. This is mainly due to strong preliminary data from the S&P Global US Purchasing Managers’ Index (PMI), which shows better-than-expected economic performance.

These solid figures have helped reduce concerns about the economy, supporting the idea that the Fed may take a more gradual approach to further rate cuts.

Therefore, the Fed's dovish comments put some pressure on the USD, but strong PMI data provides support. This mixed outlook limits significant declines in the USD, helping to keep the USD/CAD pair relatively stable, with potential for gradual upward movement.

Related News

- GOLD Price Analysis – Nov 26, 2024

- AUD/USD Price Analysis – Nov 26, 2024

- USD/CAD Price Analysis – Nov 19, 2024

USD /CAD

Technical Analysis

USD/CAD Price Analysis – Nov 19, 2024

By LonghornFX Technical Analysis
Nov 19, 2024
Usdcad

Daily Price Outlook

The Canadian dollar is gaining momentum ahead of today's crucial inflation report, with USD/CAD indicating a possible turnaround to start the week.

However, whether this momentum lasts beyond the near term will most likely be determined by adjustments in US interest rate expectations rather than domestic causes.

The USD/CAD is traded currently at 1.402 with 0.09% increase from yesterday. Markets expect Donald Trump's administration to revive inflation and halt the Federal Reserve's rate decreases.

This, in turn, adds to the USD's gains. Futures markets suggest a 58.7% chance of a Fed rate cut in December, however expectations for rate cuts through 2025 have dropped to 77 basis points (bps).

Geopolitical Tensions Boost US Dollar

The return of geopolitical tensions in the Middle East and on the Russia-Ukraine front bolsters safe-haven currencies such as the Greenback. CNN News claimed on Sunday, citing two US sources, that US President Joe Biden's administration had authorised Ukraine to use US armaments to strike inside Russia, a significant shift in Washington's attitude towards the Ukraine-Russia conflict.

Investors will keep an eye on developments related to geopolitical threats. Any hints of escalation may cause the US Dollar (USD) to rise against the Loonie.

Inflation Report in Focus as BoC Faces Key Decisions on Rate Cuts

Today's inflation report stands out amid a lacklustre global data week. The annual CPI rate is predicted to rise from 1.6% to 1.9% in October, approaching the middle of the Bank of Canada's (BoC) 1-3% target range. Core inflation, which is the average of Statistics Canada's trim and median CPI estimates, is predicted to be 2.4%, slightly higher than September's rate.

With the BoC expecting core inflation of 2.3% by December, a result that meets market expectations should do little to dampen the belief that further rate cuts are on the way. However, if an upside surprise occurs, the Bank of Canada may begin to decrease the rate of easing.

In the policy statement released on October 23, the BoC stated that the timing and speed of additional policy rate cuts will be determined by "incoming information and our estimation of its implications for the inflation outlook.

BoC Easing Cycle: Quick Start, Sluggish End

Swaps markets are divided on whether the Bank of Canada would drop interest rates by another 50 basis points at its next meeting, following the reduction in October. Traders are currently leaning towards a lower 25-point cut, with a 50-point move seen as a 44% probability.

Looking further ahead, the easing cycle is projected to slow significantly. Markets are pricing in a cumulative 88 basis point decrease by September 2025, indicating a more gradual approach.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD – Technical Analysis

USD/CAD is trading at $1.40166, down 0.02%, as bearish momentum takes hold on the 4-hour chart. The pair is currently below the pivot point at $1.40263, signaling potential downward pressure.

Immediate resistance stands at $1.40489, followed by $1.40711 and $1.41016, which could act as hurdles for any rebound attempts. On the downside, immediate support lies at $1.39888, with further levels at $1.39599 and $1.39303 providing key zones for bearish targets.

The 50-day EMA at $1.40329 adds to the resistance, reflecting near-term selling bias. Meanwhile, the RSI at 39 highlights bearish momentum but suggests the pair is nearing oversold conditions, which could trigger short-term consolidation. If USD/CAD breaks below $1.39888, it could test $1.39599, but a reversal above $1.40263 would shift the focus back to resistance at $1.40489.

For traders, short positions below $1.40260 align with the bearish outlook. A take-profit at $1.39882 offers a reasonable target, while a stop-loss at $1.40490 helps manage risk.

Selling below $1.40260 with a take-profit at $1.39882 and a stop-loss at $1.40490 aligns with the bearish trend while offering balanced risk management.

Related News

- GOLD Price Analysis – Nov 19, 2024

- AUD/USD Price Analysis – Nov 19, 2024

- USD/CAD Price Analysis – Nov 12, 2024

USD /CAD

Daily Trade Ideas

USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Nov 19, 2024
Usdcad

Daily Price Outlook

- Pivot Level: Below $1.40263 favors bearish momentum; above it, buyers could regain control.

- Resistance Zones: Watch $1.40489 and $1.40711 for potential rebound caps.

- Support Levels: Key levels to watch are $1.39888 and $1.39599 for downside extensions.

USD/CAD is trading at $1.40166, down 0.02%, as bearish momentum takes hold on the 4-hour chart. The pair is currently below the pivot point at $1.40263, signaling potential downward pressure.

Immediate resistance stands at $1.40489, followed by $1.40711 and $1.41016, which could act as hurdles for any rebound attempts. On the downside, immediate support lies at $1.39888, with further levels at $1.39599 and $1.39303 providing key zones for bearish targets.

The 50-day EMA at $1.40329 adds to the resistance, reflecting near-term selling bias. Meanwhile, the RSI at 39 highlights bearish momentum but suggests the pair is nearing oversold conditions, which could trigger short-term consolidation. If USD/CAD breaks below $1.39888, it could test $1.39599, but a reversal above $1.40263 would shift the focus back to resistance at $1.40489.

For traders, short positions below $1.40260 align with the bearish outlook. A take-profit at $1.39882 offers a reasonable target, while a stop-loss at $1.40490 helps manage risk.

Selling below $1.40260 with a take-profit at $1.39882 and a stop-loss at $1.40490 aligns with the bearish trend while offering balanced risk management.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD – Technical Analysis

Entry Price – Sell Below 1.40260

Take Profit – 1.39882

Stop Loss – 1.40490

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$378/ -$230

Profit & Loss Per Mini Lot = +$37/ -$23

USD /CAD

Daily Trade Ideas

USD/CAD Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Nov 12, 2024
Usdcad

Daily Price Outlook

- USD/CAD maintains a bullish outlook above the $1.39420 pivot point.

- RSI at 65 signals near overbought conditions, though upside potential remains.

- Immediate resistance at $1.39590 could pave the way for further gains if breached.

The USD/CAD pair is trading at $1.39476, up 0.16%, and currently maintains a bullish stance above its pivot point of $1.39420. This level serves as a critical support, indicating potential for further gains.

.Immediate resistance is situated at $1.39590, with additional levels at $1.39740 and $1.39892. Breaking through these levels could reinforce the bullish outlook, particularly as the U.S. dollar finds strength amid resilient economic indicators and higher Treasury yields.

On the downside, support emerges at $1.39322, followed by $1.39174 and $1.38974. A breach below these support levels could trigger a short-term correction, undermining the bullish sentiment.

The Relative Strength Index (RSI) is currently at 65, indicating that while USD/CAD is nearing overbought conditions, there may still be room for further appreciation. However, an RSI close to overbought territory signals that buyers should proceed with some caution as momentum could slow.

The 50-day Exponential Moving Average (EMA) sits at $1.39187, lending further support to the upward trend as long as prices remain above this average.

Given these technical indicators, USD/CAD's outlook remains moderately bullish in the near term. A buy entry above $1.39419 is recommended, with a take-profit target of $1.39703 and a stop-loss at $1.39241 for effective risk management.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD - Trade Ideas

Entry Price – Buy Above 1.39419

Take Profit – 1.39703

Stop Loss – 1.39241

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$284/ -$178

Profit & Loss Per Mini Lot = +$28/ -$17

USD /CAD

Technical Analysis

USD/CAD Price Analysis – Nov 12, 2024

By LonghornFX Technical Analysis
Nov 12, 2024
Usdcad

Daily Price Outlook

During the European session on Tuesday, the USD/CAD currency pair continued its upward trend for the third day, trading near 1.3950 level. However, the US dollar strengthened further after the confirmation of Donald Trump’s victory in the US election.

Analysts believe that Trump’s potential fiscal policies, which may boost investment, spending, and labor demand, could increase inflation risks. This might prompt the Federal Reserve (Fed) to take a more hawkish approach, raising interest rates to control inflation.

As a result, the expectations of a tighter US monetary policy are likely to support the US dollar, benefiting the USD/CAD pair. With this ongoing trend, traders are keeping a close eye on potential developments that could further impact the USD and the currency pair’s movement in the near future.

Impact of Falling Crude Oil Prices on the USD/CAD Pair

On the CAD front, the Canadian Dollar (CAD) is under pressure due to falling crude oil prices. This is because Canada is the largest oil exporter to the United States, so when oil prices drop, it negatively impacts the CAD. As of now, West Texas Intermediate (WTI) oil is trading around $67.90. Lower oil prices tend to weaken the Canadian Dollar because the country relies heavily on oil exports.

Crude oil prices are continuing to decline due to concerns about a potential trade war under a Trump administration, which could lead to tariffs and disrupt global trade. Additionally, there are worries about slower demand growth in China, a major consumer of oil.

These factors have caused oil prices to fall further, putting additional downward pressure on the CAD. Traders and analysts are watching closely to see how these developments might affect oil prices and, in turn, the value of the Canadian Dollar.

The falling crude oil prices put downward pressure on the Canadian Dollar, which may weaken the CAD against the US Dollar. As a result, the USD/CAD pair could continue to rise, benefiting from a stronger USD and a weaker CAD.

Impact of US Economic Outlook and Fed Policy on the USD/CAD Pair

On the US front, the broad-based US Dollar (USD) continues to strengthen after the confirmation of Donald Trump’s victory in the US election. Analysts believe that Trump’s potential fiscal policies could boost investment, spending, and labor demand, which might increase inflation risks.

This could prompt the Federal Reserve (Fed) to adopt a more hawkish approach, raising interest rates to control inflation. As a result, the USD and the USD/CAD pair may see further support.

On Sunday, Minneapolis Fed President Neel Kashkari said the US economy is showing strength as the Fed works to lower inflation. However, he mentioned that the Fed isn’t done yet and needs more proof before considering another rate cut.

The Fed’s goal is to bring inflation down to 2%, and until that happens, they’re unlikely to lower rates further. This cautious approach helps support the strength of the US Dollar.

Therefore, the US Dollar’s strength, fueled by potential fiscal policies and the Federal Reserve's hawkish stance, supports the USD/CAD pair. As inflation risks rise, the Fed may raise interest rates, further boosting the USD and likely pushing the USD/CAD pair higher.

USD/CAD Price Chart - Source: Tradingview
USD/CAD Price Chart - Source: Tradingview

USD/CAD – Technical Analysis

The USD/CAD pair is trading at $1.39476, up 0.16%, and currently maintains a bullish stance above its pivot point of $1.39420. This level serves as a critical support, indicating potential for further gains.

.Immediate resistance is situated at $1.39590, with additional levels at $1.39740 and $1.39892. Breaking through these levels could reinforce the bullish outlook, particularly as the U.S. dollar finds strength amid resilient economic indicators and higher Treasury yields.

On the downside, support emerges at $1.39322, followed by $1.39174 and $1.38974. A breach below these support levels could trigger a short-term correction, undermining the bullish sentiment.

The Relative Strength Index (RSI) is currently at 65, indicating that while USD/CAD is nearing overbought conditions, there may still be room for further appreciation. However, an RSI close to overbought territory signals that buyers should proceed with some caution as momentum could slow.

The 50-day Exponential Moving Average (EMA) sits at $1.39187, lending further support to the upward trend as long as prices remain above this average.

Given these technical indicators, USD/CAD's outlook remains moderately bullish in the near term. A buy entry above $1.39419 is recommended, with a take-profit target of $1.39703 and a stop-loss at $1.39241 for effective risk management.

Related News

- GOLD Price Analysis – Nov 12, 2024

- AUD/USD Price Analysis – Nov 12, 2024

- USD/CAD Price Analysis – Nov 05, 2024

USD /CAD