USD / CAD is retreating after hitting a high of 1.2743. At the beginning of the Asian session, it is trading below the SMA of 21 located at 1.2676.
Since November 10, the loonie was trading above the uptrend channel. This channel was broken on November 24 and is now below the 21 moving average which means that there could be a downward movement in the next few days towards the zone of 1.2530.
On November 22, the eagle indicator touched the extreme overbought zone around 95-points. After returning to September 30 price levels around 1.2743, a technical correction began which could continue in the next few days.
CAD rose due to risk aversion sentiment stimulated by demand for the US dollar. The greenback continues updating new highs for the year against all its rival currencies. USDX reached a 16-month high of 96.91. At the time of writing this article, USD/CAD is retreating as the loonie is getting firm.
On Wednesday, the Fed released the latest minutes from the FOMC meeting. Some policymakers said they would like to adjust the QE taper pace and raise interest rates earlier than expected if soaring inflation persists.
Given that investors have already discounted the reduction by the Fed, it is likely that the US dollar will make a technical correction in the coming days, which may help to strengthen the loonie.
Our trading plan for the next few hours is to sell USD/CAD as it is consolidating below 21 SMA and 8/8 murray, with targets at 1.2573 and through 1.2530 (200 EMA). The eagle indicator is showing a negative signal which confirms our bearish strategy.
Support and Resistance Levels for November 25 - 26, 2021
Resistance (3) 1.2732
Resistance (2) 1.2693
Resistance (1) 1.2673
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Support (1) 1.2636
Support (2) 1.2597
Support (3) 1.2573
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A trading tip for USD/CAD November 25 - 26, 2021
Sell below 1.2676 (21 SMA ) with take profit at 1.2573 (7/8) and 1.2530 (200 EMA), stop loss above 1.2705.
The material has been provided by InstaForex Company - www.instaforex.com