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USDCAD consolidation sets up for a break next week.What levels are key for traders and why | Forexlive

The USDCAD has been trending higher and higher, but the momentum has been slowing.

One catalyst has been key resistance at the 2024 high. That level was reached back in August at 1.39458 and the high prices this week have stalled just short of those levels.

That has put a ceiling on the topside.

Of course, ceilings can be broken and if done, traders will quickly be looking toward the highs from 2022 at 1.3977. Move above that level and the USDCAD’s door opens for more upside momentum with the pair trading at the highest level in over 4 years (May 2020).

When the market trends, the counter-trend traders need to prove they can take back control. Putting it simply, if the sellers cannot take back control, they are not winning. How do they take back control? By moving below technical levels.

The first is the 100 hour MA that I look toward. The MA is at 1.3911 and continues to move higher. The price of the USDCAD has seen dips below the 100 hour MA over the last 12 or so trading days including yesterday and today, but momentum has faded on the breaks. The price is currently back above the 100 hour MA at 1.3923 currently (100 hour MA at 1.3911).

The next target would be the rising 200 hour MA (green line on the chart below). That MA comes in at 1.3879. For that MA, the price of the USDCAD has not traded below it since October 2. That is nearly a month which is a long time.

So as we head into next week, the sellers will only start to win, if they can get and stay below both the 100 hour MA, and then do the same vs the 200 hour MA.

Absent that and the seller are not winning. The buyers are winning.

Technical Analysis of USDCAD

Trend and Momentum:

  • USDCAD trending higher, but momentum slowing.

  • Key resistance at 2024 high (1.39458) reached in August.

Resistance Levels:

Support Levels:

Key Levels to Watch:

  • Break above 1.39458 resistance opens door for more upside momentum.

  • Failure to break above 1.39458 keeps ceiling intact.

  • Sellers need to move below 100-hour MA (1.3911) and 200-hour MA (1.3879) to regain control.

Current Market Status:

Next Week’s Outlook: