USD/CAD remains strong ahead of key US, Canadian economic data

<p>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 […]</p>

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.

USD/CAD Daily Chart

 

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.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.