USD/CAD: Nervous Volatile Long-Term Highs Demonstrated Anew
Date
10/3/2023 2:23:34 PM
(MENAFN- Daily Forex) As of this writing the USD/CAD is traversing the 1.37300 vicinity as it trades slightly below the high-water marks it created earlier today when the 1.37500 level was challenged. The USD/CAD is essentially trading near ratios it has not tested since late November of 2022. The broad Forex market has seen the USD continue to demonstrate strength and the weakness in the Canadian Dollar is largely based on concerns the U.S federal Reserve is going to raise interest rates again in November/CAD Also Being Hit by Nervousness Because of Economic Data
On Friday of last week, the USD/CAD did hit the 1.36100 level and lower, but this move towards short-term support quickly evaporated as a solid reversal suddenly sparked. U.S. gross Domestic Product numbers came in slightly below expectations last week but still showed growth. Meanwhile, the Canadian GDP numbers came in flat and demonstrated recessionary concerns. However, it is broad market global nervousness that is causing risk-adverse trading. Higher U.S. Treasury yields continue to create demand for guaranteed returns and these bonds must be bought with USD.
Last Wednesday's move above the 1.37000 level did produce volatility until the end of last week, but yesterday's trading sustained value above the 1.37200 ratio rather stubbornly and this morning's early buying surge reinforced the notion bullish momentum remains in evidence. Traders looking for a sustained move lower may want to remain cautious for the time being, because there will be important U.S. data this week via the jobs statistics which will cause another wave of definite volatility on Friday for the USD/CAD Near 1.37200 Should be Monitored by Traders in the Short-Term
Even though the price of Crude Oil remains within sight of 90.00 USD per barrel, this has not helped the USD/CAD create bearish momentum. The upward trend in the USD/CAD since the middle of July remains easy to see technically. Traders should anticipate rather choppy conditions in the near term as financial institutions continue to gauge their outlooks regarding risk appetite. If U.S. jobs numbers are stronger than anticipated this coming Friday this could serve as a lynchpin for a stronger USD/CAD.
The USD/CAD is traversing the higher tier of its long-term price range and traders should be conservative regarding their speculative positions, particularly if they want to bet on sudden lower reversals occurring. Yes, lower moves in the USD/CAD certainly can and do occur, but the trend upwards in the currency pair has been strong and traders may want to continue to pursue the bullish momentum with quick-hitting buying positions after support has been tested Dollar Short-Term Outlook:
Current Resistance: 1.37385
Current Support: 1.37210
High Target: 1.37590
Low Target: 1.36835
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