USD/CAD Trading near the 2015 Consolidation Range Support

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USD/CAD Trading near the 2015 Consolidation Range Support

USD/CAD has been ranging since early February after making a high around 1.28. Let’s follow up on this consolidation range as USD/CAD is heading towards this consolidation range support.

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The daily chart shows that although there was a break above 1.28 in March, the USD/CAD remained in consolidation. Last week, price action failed to clear 1.28 and retreated, extending lower after the US NFP report, which disappointed forecasts and brought the greenback lower across the board.

The dollar-loonie is now hovering above the 1.2350-1.24 consolidation support zone. Given the fact that the prevailing trend is bullish, strong, and intact, we should probably respect this support area.

Now, if there is indeed a rebound this week, let’s monitor the 4H chart. If price is still bearish, there should be resistance around 1.2570-1.2575, which would keep the USD/CAD under the 200-, 100-, and 50-period SMAs. The 4H RSI should also hold below 60.

However, if price pushes above 1.26, and the 4H RSI climbs back above 60, we would lose the bearish bias and momentum, and the technical picture in USD/CAD would once again be bullish, with pressure towards the highs around 1.28.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.