USD/CAD Faces Tough Resistance at 1.1448

The Greenback started the week by extending upside movement against the Canadian dollar on Monday, taking the price to more than 1.1445. The pair ended the previous week by hitting the 5-year high following the strong employment data from the US.

Technical Analysis

As of this writing, the pair is being traded around 1.1442. The pair opened the Asian session at 1.1434 and is gradually moving forward to test the latest resistance at 1.1475. The price is facing hurdle at 1.1448, the high of November 7. The breakout, if takes place, will open the way to 1.1500 handle, thereby printing a fresh yearly high.

usdcad

On the downside, a support can be noted around 1.1318, the trend line support and 23.6% Fib level. Success in breaking this level will open the way to test the major support that lies around 1.1220, the psychological number and confluence of 50-day SMA, trend line and 38.2 Fib level, as demonstrated in the above chart.

The overall bias is bullish because of higher highs and higher lows on the daily chart.  The bias will remain bullish as far as the support area around 1.083 remains intact.

Housing Starts                  

The Canadian housing starts remained at 200.0K this November below than that of the 183.6K in the month before, says the median projection of different economists. Considered positive for the Canadian economy, a high reading is considered bearish for USDCAD and vice versa. Thus a better than expected figure may stall the price.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair is preferred if the price leaves a bearish engulfing or bearish pin bar on the daily chart.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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