December 27, 2021

Dropped 200 Pips! Can USD/CAD Excellent Again?

 The position of the king of the USD seems to have fallen a bit as market sentiment recovered (risk-on) when most experts found that the Omciron infection was not that serious.


This aspect has already contributed to the market's eagerness to increase global crude oil demand which has colored the Canadian dollar to remain strong.


But in the meantime, the USD may also be able to deliver a surprise if judged on the hawkish speech delivered by the Federal Reserve (Fed) regarding the tapering measures that want to be expedited.


The price movement on the chart of the USD/CAD pair seems to be back showing a decline of almost 200 pips to hit back to the 1.28000 zone after hitting the latest highs.


That is, the price has already managed to record the latest record in 13 weeks at the level around 1.29600 which is also the most invulnerable support bulwark in 2019 and 2020.


But the price movement in trading earlier this week (Monday) seems to be producing a bullish rhythm after the price has started moving above the resistance level of the Moving Average 50 (MA50).



This factor will certainly indirectly give an initial impression to investors for the price on the USD/CAD chart to again exhibit an aggressive rise that is expected to test the 1.28500 level.


The ability for the price movement to reach back to the level of 1.28500 will give confidence to investors to once again try the 1.29000 zone in maintaining the uptrend pattern.


But on the other hand, the RBS (resistance become support) zone of 1.28000 is likely to continue to be the focus if the price continues to decline as shown last week.


A lower decline will probably push the price to retrace to the RBS zone of 1.27000 and the expectation that the price movement may be able to slow down to the support zone of 1.26000.