USD/CAD remained strong on the first trading day of the new year, just off its recent multi-year highs, ahead of an important week of economic data for both the US and Canadian dollars.
Wednesday brings trade balance figures from both countries, while Friday highlights the crucial employment situations for the US and Canada.
Since a new 11-year high of 1.4000 was hit little more than two weeks ago in mid-December, USD/CAD has been in a relatively confined consolidation between that 1.4000 resistance level to the upside and the key 1.3800 support level to the downside.
Monday saw a sharp rise for the currency pair on some renewed strength in the US dollar as well as a pullback in crude oil after its initial surge earlier in the day.
From both the longer-term and shorter-term perspectives, USD/CAD continues to trade within a clear and strong bullish trend. With the Fed on a path of monetary policy tightening in the US, in stark contrast to the Bank of Canada’s potentially opposite trajectory, as well as persistently depressed crude oil prices weighing on the energy-correlated Canadian dollar, this bullish trend could likely continue higher.
With key support at the noted 1.3800 level, any sustained breakout above the 1.4000 level, which would confirm a continuation of the longstanding bullish trend, should target the next major upside price objective at 1.4200 resistance, last hit in mid-2003.
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