USD/CAD: the dollar is significantly strengthening 26 January 2021, 10:20

 

USD/CAD: the dollar is significantly strengthening

26 January 2021, 10:20

Scenario
Timeframe	Intraday
Recommendation	BUY STOP
Entry Point	1.2805
Take Profit	1.2900
Stop Loss	1.2738
Key Levels	1.2622, 1.2664, 1.2700, 1.2738, 1.2800, 1.2850, 1.2900, 1.2950

Alternative scenario
Recommendation	SELL STOP
Entry Point	1.2755
Take Profit	1.2700
Stop Loss	1.2800
Key Levels	1.2622, 1.2664, 1.2700, 1.2738, 1.2800, 1.2850, 1.2900, 1.2950

Current trend

Today, during the Asian session, the USD/CAD pair is actively growing, developing the “bullish” momentum that formed at the end of the last trading week, when the pair retreated from its record lows. Now, the instrument has strengthened by 0.30% and is testing the level of 1.2760 for a breakout.

Some support for the price is provided by the improvement of the epidemiological background in the United States, which may allow easing restrictive measures in the near future. Also, investors are noticeably encouraged by the actions of the new President Joe Biden, who has already signed several important bills and also announced a new package of measures of $1.9 trillion to support the national economy.

Support and resistance

On the daily chart, Bollinger Bands are growing slightly. The price range expands from above, letting the “bulls” renew local highs. The MACD indicator is growing, maintaining a strong buy signal (the histogram is above the signal line). Stochastic is showing similar dynamics but is rapidly approaching its highs, which indicates that USD may become overbought in the ultra-short term.

The current readings of technical indicators signal in favor of further development of upward dynamics in the short and/or super short term.

Resistance levels: 1.2800, 1.2850, 1.2900, 1.2950.

Support levels: 1.2738, 1.2700, 1.2664, 1.2622.

Trading tips

Long positions may be opened after the breakout of 1.2800 with the target at 1.2900. Stop loss – 1.2738. Implementation period: 2–3 days.

Short positions may be opened after the rebound from 1.2800 and the breakdown of 1.2760 with a target at 1.2700. Stop loss – 1.2800.