FX.co ★ USD/CAD

I noticed that the US Dollar to Canadian Dollar (USD/CAD) price action started the day in a clear battle between buyers and sellers, and I observed that this initial struggle kept the price swinging within a narrow range between the support level at 1.3794 and the resistance level at 1.3810, which to me indicated market indecision. I then saw that as the US trading session was about to open, the price finally managed to break out of this sideways range to the upside, and I interpreted this breakout as a short-lived bullish push that carried the pair slightly higher. I paid close attention to the price action that followed, and I recognized that a retest of the broken level quickly took place, which to me confirmed the legitimacy of the breakout because the retest held and acted as a springboard for further gains. I watched as the price extended 50 pips higher, reaching a daily high at 1.3858, and I realized that this point could now serve as a fresh resistance level because the price immediately struggled to advance beyond it. I noticed that the hour after the breakout turned bearish and pushed the pair back down by around 25 pips, which suggested to me that sellers were defending the 1.3858 level aggressively. I considered that the decline could extend further, and I believe the price may fall toward the 1.3827 level, which previously served as resistance and could now act as support. I personally think that if the price holds at this newly tested support level, it will provide the market with the foundation to resume its upward movement. I am convinced that as long as the support at 1.3827 holds, the broader outlook remains bullish, and I expect the pair to attempt another climb toward retesting 1.3858 and possibly breaking higher.

I believe that recently, when the American dollar was broadly sold off across the entire market, USD/CAD also experienced noticeable pressure, and I observed that the dollar fell significantly in this major, which confirmed to me that it did not remain on the sidelines of global sentiment. I noticed, however, that last Friday USD/CAD behaved differently compared to other majors, and I saw that in this pair the American dollar even managed to strengthen a little, which I attribute to the fact that Canadian news slightly outweighed the influence of US news. I also recognize that today, in the second half of the trading session, the dollar corrected and strengthened across the market, and I observed that something similar occurred in the Canadian dollar as well, but I must admit that the outcome of this correction was far more modest than expected. I can clearly see that even on the H1 chart, which I am analyzing now, the situation has not shifted in favor of an upward movement, and I specifically note that the horizontal resistance at 1.3852 was tested and slightly exceeded at 1.3858, but I saw that there was no consolidation above this top, which to me signals that the market is not yet ready to support further growth. I consider this lack of consolidation an important technical factor because I rely on it to assess whether momentum has actually changed or not, and I must conclude that even such a modest timeframe as H1 has not restructured itself in favor of buyers. I believe that until I see a confident breakout and consolidation above the resistance, I cannot justify entering long positions, and therefore I have decided that for now I will remain outside the market for this major, patiently waiting for clearer signals.