Canadian Dollar Stronger Than US in Recent Trading – Price Action Analysis 13th July
- The Canadian dollar is stronger than its US counterpart over recent trading sessions and has outperformed its currency major rivals. The following 4 hour timeframe relative strength chart – where each point is derived from a four hour period – shows the Canadian dollar as the strongest currency. This broad based overview of currency strength is one of our primary tools when analysing the FX market.
Currency Correlation – Relative Strength 4 Hour Chart
- The loonie found strong resistance around the 1.0250 area, a 2-week high, which has multiple daily candle lows in close proximity and has acted as a price pivot. The USD/CAD pair has declined strongly as commodities pared losses.
- We note that the dollar index is trading above the key 83.54 area but do not necessarily see this as a reason to be bullish USDCAD in the near term, as the CAD only has a 9.1% impact on the dollar index (when compared with the 57.6% impact on the dollar index that euro has).
- Price action analysis shows a long upper shadow on yesterdays candle is also hinting at further potential downside and price is once again trading under the 20 period SMA on the daily chart.
- 1.0100 is the 5th July daily low and is eyed as potential support on any move lower. Further to this is the cluster of technical levels around 1.0065 to 1.0045. This has the 100 period SMA combined with FE100 and a significant previous resistance level which could subsequently become support. We would be reticent to look for any longs if the CAD continues to outperform the key currencies but would however note this area if in any existing shorts.
US Dollar/Canadian Dollar – Daily Chart
