The US dollar firmed for a fifth successive session vs. the Canadian dollar Wednesday amid weaker oil prices and a modest uptick in the US dollar index. Although incapable of breaching Tuesday’s high 1.3796, 1.37 engaged as support on USD/CAD, with 1.38 now a tempting resistance.
The technical picture on the weekly timeframe has price eyeing the 2016 yearly opening level at 1.3814 after thrashing Quasimodo resistance at 1.3520, now a serving support. Support on the daily timeframe at 1.3653 remains in play, withstanding a notable downside attempt during Tuesday’s session. Resistance at 1.3807 is visible as the next upside target on this scale.
Should we cross paths with 1.38, a fakeout above the level is likely, with weekly resistance at 1.3814 and daily resistance at 1.3807 calling for attention. Note buy-stop liquidity north of 1.38 will likely entice sellers, and pitch the candles south of 1.38.
Attempting a short from 1.3814/1.38, however, is considered countertrend (primary trend on the weekly timeframe seen north since September 2017). As such, a pullback, if any, might be shaky and unable to reconnect with 1.37.
Disclaimer: The information contained in this material is intended for general advice only.