USD/CAD Ready for Reversal Towards 1.37.

14 nov 2023

The USD/CAD rate is hovering around 1.3820 during the early European session on Tuesday, with buying interest, followed by the immediate resistance region around 1.3850, in line with the previous week's high at the 1.3854 level. The Moving Average Convergence Divergence line is situated above the centerline but shows convergence below the signal line, suggesting a potential shift in momentum towards bearish sentiment in the USD/CAD pair. Market participants are adopting a cautious stance ahead of U.S. inflation data; figures higher than expected could strengthen the U.S. Dollar (USD), and consequently, the USD/CAD pair may revisit the yearly high at the 1.3898 level. On the downside, the USD/CAD could find key support around the psychological level at 1.3800, followed by the 14-day Exponential Moving Average (EMA) at 1.3778. A decisive break below the latter could force the USD/CAD pair to navigate the region around the 23.6% Fibonacci retracement level at 1.3706, aligned with the significant level of 1.3700. It will be interesting to see the market's reaction to the dollar data in an hour. The market is in an uptrend channel and appears to have bounced off a daily supply zone. Stay tuned with us to follow developments. Happy trading to everyone from Nicola, the CEO of Forex48 Trading Academy.