(MENAFN - DailyFX) USD/CAD Talking Points: USD/CADhas been range-bound for a month now, with price action building into a box between resistance at 1.3500 and support coming from a few key confluent Fibonacci levels.Are breakouts nearing in USD/CAD?Yesterday saw a fast and buyers have continued to push ever since, exposing the resistance side of the recent range. DailyFX Forecasts are published on a variety of currencies such as theCanadian Dollar and are available from theDailyFX Trading Guides page . If you're looking to improve your trading approach, check outTraits of Successful Traders . And if you're looking for an introductory primer to the Forex market, check out ourNew to FX Guide . Do you want to see how retail traders are currently trading USD/CAD? Check out ourIG Client Sentiment Indicator .
USD/CAD Reversal Rally Inside of Month-long Range TheCanadian Dollarstarted the year with a strong rush of strength as USD/CAD fell by more than 500 pips in the month of January. Since then, however, it's largely been continued weakness in the Canadian Dollar as USD/CAD has pushed back up to the 1.3500 handle. To be sure, there have been instances of congestion along-the-way. From early-March into late-April, the pair put in both lower-highs and higher-lows and then from late-April into currentprice action , a horizontal range has built-in between two key areas on the chart. At resistance, the 1.3500 psychological level has helped to temper the highs over the past month while support has been furnished from a confluent batch ofFibonacci levelsrunning from 1.3361-1.3385.
USD/CAD Eight-Hour Price Chart
Chart prepared byJames Stanley
I had looked into the range in USD/CAD in Tuesday's webinar.Since then, price action has traversed almost the entirety of that formation as yesterday's test below 1.3361 was aggressively reversed by buyers that have now pushed prices-higher more than 100 pips higher.Price action in the pair is now fast approaching the 1.3500 handle , which has been a key component of resistance for the build of this month-old range.
This could, at the very least, make near-term strategy rather clear: For those that are comfortable looking at USD-weakness scenarios, short-side setups off of range resistance can be attractive, looking for a revisit of range support sub-1.3400. For those looking to retain a bullish USD-bias, awaiting a topside break of that range resistance can re-open the door for bullish breakout scenarios or, alternatively, a revisit to range support. And while directional prognostications and predicting breakouts can be a perilous sport, at the very least, the risk management of the situation is fairly clear.
USD/CAD Two-Hour Price ChartChart prepared byJames Stanley
To read more: Are you looking for longer-term analysis on the U.S. Dollar? OurDailyFX Forecasts have a section for each major currency, and we also offer a plethora of resourcesUSD -pairs such asEUR/USD ,GBP/USD ,USD/JPY ,USD/CAD . Traders can also stay up with near-term positioning via ourIG Client Sentiment Indicator .
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--- Written by James Stanley, Strategist for DailyFX.com
Contact and follow James on Twitter:@JStanleyFX