USDCAD: Stuck In A Range, Eyes On 1.3977 And 1.3092

By Staff of ForexCycle

Sunday, January 14, 2024 6:16 AM EST

USDCAD has been trapped in a lateral dance between 1.3092 and 1.3977 for months, frustrating traders with its indecisiveness.

Freepik

The pair recently flirted with a downside break but held ground at 1.3092, suggesting that another push towards the upper bound at 1.3977 could be in the cards over the coming weeks.

Bullish Bias:

The recent bounce off 1.3092 reinforces the underlying bullish sentiment within the long-term uptrend that started at 1.2006.
A breakout above 1.3977 would be a significant signal, potentially reigniting the uptrend and paving the way for a climb towards the next resistance level at 1.4667, the previous high.
This scenario would indicate increased buying pressure for the US dollar against the Canadian dollar.

Bearish Potential:

While the immediate outlook favors upside, a failure to conquer 1.3977 could lead to a pullback, with 1.3092 acting as the first line of defense.
A breakdown below 1.3092 would be a major bearish signal, potentially invalidating the long-term uptrend and triggering a decline towards the next support level around 1.2500.
This would suggest a weakening US dollar and strengthening Canadian dollar.

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