Canadian Dollar Breaks Through a Key Technical Levelby
Currency cracks 100-week moving-average, first time since 2013
Bullish development exposes USD/CAD to 1.22-1.20 area
The Canadian dollar cleared a major technical hurdle versus the U.S. dollar last week, which puts it en route toward next significant resistance at around 1.2000.
The Canadian dollar broke above the 100-week moving-average line versus its U.S. counterpart for the first time since 2013. The multiple times the line held for the U.S. dollar is testament to how strong a support it was and underscores the significance of the break-out.
The next layer of support for USD/CAD is located within the 1.22-1.20 area, which comprises the 2012 bull trendline, the 50% retracement of the 2011-2016 rally and the 200-week moving average. A weekly close above 1.3388, the January high, would question the negative outlook.
- Momentum on USD/CAD is deteriorating, with weekly MACD diving into sub-zero, supporting the negative trend.
- CAD is the top performer vs the USD among G-10 currencies in the aftermath of U.S. elections, with the greenback falling 3.1%.
NOTE: Sejul Gokal is a technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.