The USD/CAD pair remains in a range, fluctuating between solid resistance at 1.41 and significant support around 1.40, as overarching fundamentals suggest a slow but steady strengthening of the U.S. dollar. Pullbacks seem to present buying opportunities unless the pair falls below the 200-day EMA. The US dollar fluctuated against the Canadian dollar during the Friday session, as the USD/CAD market continues to encounter substantial resistance around the 1.41 level. Considering the circumstances, there is significant support at the 1.40 level, indicating that any pullback in this market could offer a potential buying opportunity.
The 50-day EMA is positioned slightly beneath the 1.40 level, creating a noteworthy area for USD/CAD due to its past role as resistance and the inherent market memory associated with it. This figure holds considerable psychological importance and is quite substantial in size. Analyzing historical data, we observe substantial support around the 1.4250 mark in USD/CAD, which suggests a potential movement towards that zone and possibly extending to the 1.45 level.
The broader USD/CAD trend may only be deemed concluded if the pair falls below the 200-day EMA at the 1.3912 level. This has exhibited a smooth, rounded bottoming pattern, indicating that the movement may possess durability. The Canadian economy exhibits signs of sluggishness, whereas the U.S. economy continues to show relative strength, reinforcing the upward bias in USD/CAD.
There is also a question regarding oil, which generally supports the Canadian dollar, although its influence against the greenback has diminished recently. The current state of oil is notably weak. Given the current landscape and the persistent interest rate differential favoring the United States, it is logical to anticipate that USD/CAD will continue its upward trajectory in due course. The movement is expected to be gradual rather than sudden, as traders are likely to capitalize on dips to uncover value and secure the swap at the conclusion of each trading session.