The USD/CAD sees familiar play near 1.3100 following last Friday’s last-minute rebound for the USD. The pair has maintained a steady range bound price action near 1.3100 to 1.3115 across Asian and majority of European market hours despite opening the new trading week just beneath the key level. The US Greenback was steady against the broader markets as investors await a spark of momentum inspiration. While the pair may trade in range bound fashion, the price action remains well near Friday’s highs indicating that market sentiment remains in favor of US greenback. As of writing this article, USDCAD pair is trading near flat at 1.3101 up by 0.05% on the day.
Cautious investor sentiment Ahead of US Mid Term Elections Keeps Dollar’s Upside Limited
The Bank of Canada (BOC) was firmly bullish last week, spurred on by economic data that continues to improve for the Canadian domestic economy, but the ongoing slump in crude oil markets is taking the wind out of the CAD’s sails, and the Greenback is giving the Canadian Dollar a run for its money which has resulting both sides waging war for control moving in range bound price action. Monday will be kicking off the Loonie’s action with a speech from the BOC’s Poloz at 13:10 GMT, followed by the US’ Markit PMIs and ISM Non-Manufacturing PMIs due at 14:45 GMT and 15:00 GMT, respectively, but with the US mid-term elections looming over this week, data could see a limited impact as traders await election results.
When looking from technical perspective, The USD/CAD is trading alongside an uptrend support line that began in early October at around 1.2775 and was confirmed recently. It will be interesting to see if the pair continues riding the line. The USD/CAD trades above the 50-day and 200-day Simple Moving Averages. In addition, Momentum is positive. 1.3175 capped the pair in late October and also back in August. Further up, 1.3225 was a peak in late August. Just below the round number of 1.3000, we find 1.2970 that was a swing low in October and provided support in both September and August. Lower, 1.2920 was a low point in mid-October. 1.2880 is a critical level after working as a double bottom. 1.2775 is the last line to watch.
This article was originally posted on FX Empire
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