USD/CAD – How Significant is a Break Above 1.30?

Is Bullish Momentum Gathering?

OANDA fxTrade Advanced Charting Platform

USDCAD has been climbing quite aggressively over the last couple of months, rising around 6.5% since the end of January and hitting levels last seen in June.

After running into resistance around 1.30 last week – a notable psychological level and important support late 2016 and early 2017 – the pair fell back to 1.28 where it found support from a combination of the 38.2% fib level and the 233-day simple moving average.

A shallow correction like this could be a sign of a very bullish market and with the pair having recently breached the 200 and 233-day SMAs, it joins a growing list of bullish indicators.

Should the pair hold onto today’s gains and close above 1.30, the next key technical levels above will be around 1.32, with it having found support around here last time it traded above between March and June last year. It’s worth noting though that 1.32 is not a precise level, the pair found support during these months roughly between 1.3165 and 1.3265.

One interesting thing about the recent rally has been the momentum indicators which aren’t fully supportive of price action. The MACD moving averages are making new highs, while the MACD histogram is making lower highs and the Stochastic is relatively neutral. This in itself isn’t really a bearish signal but it will be very interesting to see how these look should we reach the 1.32 zone.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

Latest posts by Craig Erlam (see all)