Canadian Dollar Outlook:
- The Canadian Dollar[1] has fallen to a nearby trendline, a level that has held price afloat since late 2017
- Forming a series of lower highs dating back to 2016, the longer-term price chart suggests a break lower may occur
- Still, support at the 1.3025 level has proved resilient and could keep USD/CAD[2] trapped in its 2019 range
Canadian Dollar Outlook: USD/CAD Plummets to Support, Will it Break Out?
The Canadian Dollar was held to a tight range in 2019 versus the US Dollar[3], amid a flurry of conflicting fundamental and technical themes. While little progress was made compared to the first few days of the year, USD[4]/CAD was able to establish a series of lower highs over the months, which align with the pair’s longer-term downtrend dating back to 2016. Now, USD/CAD is in position to probe an ascending trendline from September 2017 in a move that could see the pair extend its longer-term losses into the new year if bears are successful.
USD/CAD Price Chart: Weekly Time Frame (January 2016 – December 2019) (Chart 1)
To be sure, the area near which price currently resides possesses a substantial amount of technical influence within the broader picture and has the potential to refute a move lower. Enjoying support from the trendline around 1.3100 and subsequent buoyancy around the pair’s July swing low at 1.3025. Coupled with the relatively quiet holiday trading conditions, the technical barriers may well stall a move lower for the time being which could allow for another retest of resistance around 1.3200 or even 1.3350.
USD/CAD Price Chart: Daily Time Frame (January - December 2019) (Chart 2)
That being said, it may only be a matter of time until USD/CAD
