USD/CAD sideways, consolidating above 1.3100

USD/CAD moving without clear direction, still near monthly highs.
Technical outlook still points to the upside, but gains remain limited while below 1.3150.

Matías Salord FXStreet

The Canadian dollar is trading flat against the greenback on Tuesday amid limited price action across financial markets. The USD/CAD pair rose from the 1.3100 zone and peaked at 1.3143. From the top pulled back and during the last hours, it has been trading between 1.3140 and 1.3115. The loonie so far has been unable to benefit from a modest slide of the US dollar against commodity and emerging market currencies.

Economic data from the US had no impact today. On Wednesday, ADP employment data is due in the US, although, attention could remain on equity prices and the escalation in trade tensions between the US and China. In Canada, tomorrow GDP data will be released. "A solid GDP report would offer a touch of support to the loonie. The knee-jerk on a good number could see USD/CAD reverse part of the recent gains, though we would be inclined to fade a positive response”, wrote TDS analysts.

The pair continues to show a positive tone but at the same time not strong enough to make a firm break of the 1.3150 area that could clear the way to more gains. While a consolidation well under 1.3100, could signal a potential peak, suggesting corrective moves ahead.

USD/CAD Technical levels

To the downside, support levels are seen at 1.3115 (US session low), followed by 1.3095 (Oct 30 low / short-term uptrend line) and 1.3065. On the flip side, resistance might be located at 1.3040 and then at 1.3155/60 (last week high) and 1.3195.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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