On the daily chart below, we can see that the price failed to break the triangle last week. The price found sellers at the trendline and the resistance at 1.3520. USD/CAD is one of the ugliest major pairs in terms of price action as it’s been ranging for a long time now. This is a signal of uncertainty and strength of both currencies.
The USD is supported by a repricing higher in interest rates expectations and the CAD has been doing good thanks also to high oil prices. Buyers will need a clear breakout to the upside to start piling in and target the top of the triangle at 1.3950. On the other hand, sellers will need a breakout to the downside to target lower lows.
On the 4 hour chart below, we can see more closely the rangebound price action that’s been going on for over a month now. We have the tight range between the resistance at 1.3450 and the support at 1.3350 with the high at 1.3520 and the low at 1.3265.
If the price falls back into the range, then we should expect a further fall to the support at 1.3350. As of now, the resistance of the range at 1.3450 turned support and may be the area where buyers will pile in to retry another breakout of the triangle.
On the 1 hour chart below, we can see that after bouncing from the resistance turned support at 1.3450, the moving averages switched to a bullish bias. This signals that the buyers are in control for now and they should fold only if the moving averages turn bearish and the price falls back into the range.
We have US PMIs today and given that good news is bad news now for risk sentiment, we may see the USD being bid in case the PMIs surprise to the upside. Anyway, the breakouts of the key technical levels mentioned previously will give the direction.
