USDCAD has been on the rise since the Bank of Canada reduced rates by 25 basis points last week. Currently, the price is testing the major trend line resistance of a triangle on the daily chart. There is speculation about a possible breakout, especially in a risk-off environment with lower stock prices and crude oil.
Looking at the 4-hour time frame, there is a chance that the upward movement from July 11th is part of an ongoing impulse. The current pause from the 1.3845 resistance level could be wave four, setting the stage for a push higher later in the week towards wave 5.
If USDCAD closes above 1.39 on a daily basis, it could signal further upside potential for the pair. This could lead to a major breakout on the daily time frame.
It is important to note that trading forex, futures, or futures options carries a high level of risk and may not be suitable for all investors. It is crucial to conduct extensive research before making any investment decisions.
In addition to the technical analysis provided in the article, it is also worth considering the fundamental factors that could impact the USD/CAD pair. Factors such as economic data releases, geopolitical events, and central bank announcements can all influence the direction of the currency pair.
Traders should also keep an eye on the US dollar index, which measures the value of the US dollar against a basket of major currencies. Any significant movements in the dollar index could have a ripple effect on USD/CAD.
Overall, while the technical analysis points to a potential breakout opportunity for USD/CAD, it is essential to consider both technical and fundamental factors before making any trading decisions. By staying informed and conducting thorough analysis, traders can better navigate the volatile forex market.