In today's review of the North American dollar pair, we will look at the price charts to determine the further direction of the USD/CAD currency pair. Since this tool has infrequently been analyzed recently, let's start exploring the charts from the weekly scale.
The weekly chart clearly shows the consolidation of the quote, which the last two Doji candles can judge. The narrow price range in which USD/CAD has been trading in recent weeks provides for a subsequent good directional movement, which we will see (if we see) as early as next week. In the meantime, we can assume with a high degree of probability that the pair has completed its current and rather long downward cycle. If so, we can expect a change in the price dynamics of the instrument and the movement of the quote in the north direction. It is now quite problematic to say when it will happen and whether it will happen at all. However, we cannot completely exclude the possibility that the pair will resume its downward trend after the current consolidation. It will be signaled by a true breakdown of the most important psychological and technical level of 1.2000. In such a development, sales can be considered on the pullback to 1.2000, possibly in the medium term. In a bullish scenario, you will need to pass the red line of the Ichimoku Tenkan indicator, which is located at 1.2330, and then output the quote up from the descending channel. However, there is also a blue Kijun line, which can provide strong resistance and return the price to the limits of the channel. Given that the Kijun is at 1.2480, the bulls need to move trading above another significant technical and psychological level of 1.2500.
And on the daily chart, the blue Kijun line has already fallen closer to the price and is putting pressure on it. Thus, the # 1 task for USD/CAD bulls will be to break the daily Kijun line, which is now near 1.2100. After that, we can consider the subsequent rise to 1.2200, where the maximum trading values were shown on May 13 of this year. The more distant goal of the players to increase the rate will be the level of 1.2260. The blue 50 simple moving average passes, and the 38.2 level on the Fibonacci grid stretched to a decline of 1.2652-1.2006. The USD/CAD currency pair is trading in a very narrow range, where the red Tenkan line provides the support, and the resistance, as noted above, is the blue Kijun line. Given the far from a detailed technical picture on the two timeframes considered today, I recommend that you take a wait-and-see position on the USD/CAD pair and wait for clear signals about the further direction of the exchange rate. In my personal opinion, there is a better chance that the downward trend in USD/CAD is close to its end. However, for a clearer understanding of what is happening, unambiguous signals are needed. I believe that only after they appear will it be reasonable to open positions on the Canadian dollar.