Limited Mid-Term Upside Potential

Forex

Summary:

USDCAD remained neutral on Monday. While short-term momentum is developing around moving averages, indicating a potential bullish crossover, the mid-term trend appears less optimistic.

SELL USDCAD

EXP

EXPIRED

1.38000

Entry Price

1.32180

1.39760

1.37981 -0.00165 -0.12%

Pips

EXPIRED

1.32180

1.36971

Exit Price

1.38000

Entry Price

1.39760

Fundamentals

USDCAD attracted some dip-buying on the first day of the new week, although lack of follow-through action kept it within the familiar range of the past week. Spot prices are currently just above the 1.3750 level, with a modest daily gain of less than 0.20%, driven by multiple factors. Therefore, waiting for strong follow-through buying before further gains is prudent.

Investors now await Monday's economic data, including Canada's housing starts and the U.S. NY Empire State Manufacturing Index, due later in the North American session. These data points, along with oil price dynamics, should help capture short-term opportunities.

Technical Analysis

USDCAD continued its range-bound trading on Monday, maintaining a neutral bias intraday. In the short term, the corrective decline from 1.3845 should have completed already. As long as support at 1.3662 holds, further gains are expected. A break above 1.3790 would retest 1.3845. Conversely, a break below 1.3662 would tilt the bias downward, extending the corrective pattern from 1.3845 and pushing prices lower again.

From a mid-term perspective, the price action from the 2022 high of 1.3976 is seen as a corrective pattern. Should another decline occur, strong support should be found above the resistance at 1.2947. This scenario becomes increasingly evident due to the structural characteristics of the Canadian dollar, which necessitates such adjustments.

Trading Recommendations

Trading Direction: Short

Entry Price: 1.3800

Target Price: 1.3218

Stop Loss: 1.3976

Valid Until: 2024-07 - 02 23:55:00

Support: 1.3662, 1.3603, 1.3589

Resistance: 1.3765, 1.3791, 1.3845

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