Mazen Issa, Senior FX Strategist at TD Securities, remains focused on the USD/CAD pair which has shown a significant amount of resilience this week. The 1.2130/50 area represents a cluster of technical significance that could signal a short squeeze if broken – failure to do so could return focus to the downside.
A cluster of technical tresholds for USD/CAD
“The 1.2130/50 area represents an intersection of two trendlines. The first is trend resistance established from the April 21st 2021 high, while the other is trend support established from the Sep 2020 and Mar 2021 lows. The combination of the technical thresholds suggests that USD/CAD could be in for a short squeeze towards 1.2250/60.”
“The daily and weekly RSIs suggest that USD/CAD is oversold, but price action has been rather resilient.”
“We are inclined to respect price action from here; failure to breach the 1.2130/50 pivot this week is likely to return focus back to the downside.”
“We think there may be some hesitancy until we hear from Governor Macklem today where we get the sense that a decent contingent in the market has a false hope that he may jawbone the currency lower or backtrack on recent optimism.”