USD/CAD sits at fresh 2017 tops, what next?

Dhwani Mehta FXStreet

The US dollar paused its bullish run against its Canadian counterpart over the last hours, sending USD/CAD in a phase of upside consolidations near four-month highs reached at 1.3560.

The spot rallied hard in Asia, after the bulls found renewed bids near 1.35 heads in the overnight trades. The Canadian dollar witnessed aggressive selling amid reports that the Trump administration plans to impose 20% tariff on soft lumber imports from Canada. Such a move by the Trump administration will hamper trade relations between both the North American economies.

Moreover, fresh bid-wave that caught the greenback across the board also aided the latest leg higher in the major. However, further upside appears capped as oil prices have started to recovery after the previous drop, offering some respite to the CAD bulls.

Focus shifts towards the fundamentals now for fresh impetus on the prices, with the US CB consumer confidence and new home sales data due on the cards.

USD/CAD Technical levels

Analysts at Brown Brothers Harriman offered their technical outlook, “The technical indicators point to additional US dollar strength, with CAD1.36 being the next obvious target. In addition to corresponding to the highs from Q4 16, it is also the 50% retracement objective of the US dollar slide from the January 16 high near CAD1.4700. The greenback's sharp advance is forcing the Bollinger Band to widen. The upper band is found near CAD1.3500.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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