Yesterday, USDCAD has nudged above 1.2800, drawing in on the 1.2824 three-week high that was seen last week. BoC policymaker guidance over the last month that the central bank is in now rush to continue with its gradual tightening cycle has taken the wind out of the sails of the Canadian dollar. IT is expected that the next BoC rate hike will be in March, while the Fed is on track to tighten next month.
Today, USDCAD is traded above yesterday’s closing, by breaking the recent resistance at 1.2825, while significant is the fact that rejected the 20-Day MA and 38.2 % Fibonacci level. The Fibonacci retracement was set since May’s peak at 1.3790. This northwards move complies with the price action seen the last 7 consecutive days, but also with the weekly time frame seen since late August. Hence with Daily RSI positively configured at 62 and Stochastic above neutral area, sloping positively at 60, a Long position was taken with entry at 1.2829. Targets have been set at below 50.0 Fibonacci at 1.2894. Target 2 is at 200 Day MA at 1.2978 and will be triggered once USDCAD breaks the 50.0 Fibonacci area, at 1.2930, which consider be a strong Resistance level. Support has been set between 1.2720-1.2740 area.
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