USDCAD Chart Technical Outlook is likely to suffer on high crude prices, 1.3495 and 1.3450 on the bears’ focus.
The US Dollar is on a positive trend against the CAD, posting higher lows since bottoming at 1.3380 in mid-September, although the resistance area at 1.3540 seems a tough nut to crack for USD bulls.
US Dollar strength, fuelled by strong US macroeconomic data and hopes of further Fed tightening has been offset by a sharp rally in crude prices, Canadian main export, which is providing strong support to the loonie.
In this context, I expect further consolidation with the market awaiting the final reading of the second quarter of US GDP and Fed Powell which might shed some more light on the Bank’s next monetary policy steps.
The 4h 50 SMA, at 1.3480 is holding bears so far, ahead of 1.3445. On the upside, bulls would need to breach 1,3540, the confluence of the 4h 100 and 200 SMAs, and the September 15 high to confirm the upside trend and shift the focus towards 1.3590.