USD/CAD Forecast: Monthly chart favors retest of January highs, impending key MA cross


For USD/CAD, the path of least resistance is to the higher side, according to its monthly chart.

The currency pair is currently trading at 1.3380 – down nearly 300 pips from the high of 1.3362 hit in January.

Despite the pullback, the technical chart remains constructive, as the pair bounced up from the 5-month moving average (MA) of 1.3280 earlier this month, reinforcing the bullish view put forward by that ascending average. 

Monthly chart

As seen above, the pair created another bullish higher low along the ascending 50-month MA in February (marked by arrow), validating similar higher lows created along that average since September 2017 and the golden crossover (a bullish cross of the 50- and 200-month MAs) confirmed in April 2017.

Further, the 100-month MA is about to cross the 200-month MA from below. That would only strengthen the bullish setup indicated by the flag breakout – a continuation pattern which accelerates the preceding bullish move – witnessed in October 2018. 

As a result, the spot looks set to retest the December high of 1.3662 in the next month or two. A break higher would solidify the flag breakout and allow a rally to 1.40.

The bullish case would weaken if and when the pair finds acceptance below the ascending 50-candle MA, currently at 1.3054.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD: Bid for fifth straight day ahead of Fed speak

EUR/USD is extending the four-day winning streak with markets offering US Dollars amid a rally in gold prices. EUR/USD's impending move toward 1.16, as called by technical charts, will likely gather pace if the Fed Chair Powell reinforces rate cut expectations with dovish comments later today.

EUR/USD News

GBP/USD undermines increasing odds for hard-Brexit while aiming 50-day SMA

Even with the UK PM candidate Boris Johnson reiterating his pledge to leave the EU on October 31, the GBP/USD pair continues to trade on the front foot near 1.2750 heading into the London open on Tuesday.

GBP/USD News

USD/JPY: Bears take a breather as risk aversion holds the spotlight

Be it the latest downbeat print of the US activity data or the US-Iran tension, not to forget uncertainty surrounding the G20, risk aversion holds the spotlight. The USD/JPY pair dropped to a fresh 24-week low of 106.78 before recovering to near 107 handle.

USD/JPY News

US Conference Board Consumer Confidence Preview: Employment sustains optimism

Income gains, employment and general economic prosperity support confidence. Decline in Q2 GDP not impacting sentiment. Low inflation and faling interest rates are positive consumer trends.

Read more

Gold consolidates the rally to 6-year highs

Amid ongoing USD weakness and escalating US-Iran geopolitical tensions, the gold bulls take a breather and consolidate the upsurge to fresh six-year tops near 1439 levels. Focus on Powell's speech 

Gold News

Majors

Cryptocurrencies

Signatures