Canadian Dollar Price Forecast:
- This morning’s Bank of Canada rate decision[1] brought upon a strong Canadian Dollar[2].
- This allowed USD/CAD[3] to pullback to a key area on the chart, a price that had set support in late-August showed as resistance last week. But after this week’s breakout, that level has may be repurposed as support.
- Can bulls continue to drive USD[4]/CAD? If there is a grander USD-recovery theme at play, the long side of USD/CAD may hold some attractiveness for those looking at bullish US Dollar[5] themes.
- The analysis contained in article relies on price action[6] and chart formations[7]. To learn more about price action or chart patterns, check out our DailyFX Education[8] section.
USD/CAD Pulls Back After Strong Breakout to Start the Week
It’s been a rough summer for US Dollar bulls as the currency has spent much of the past few months in varying forms of sell-off. But with Labor Day now in the rear view mirror the potential for change is afoot; and the USD has begun to bounce from a key area of longer-term support[9] that may soon allow for the longer-term tides to turn.
This theme has been on full display in USD/CAD of recent. Towards the end of August, as USD bears were getting their run, USD/CAD had built into a descending triangle-like pattern, with horizontal support at a confluent spot on the chart around 1.3150 as sellers continued to produce a series of lower-highs. As looked at in the webinar a few weeks ago[10], that impasse was unlikely to last, and given the harboring potential of a descending triangle
