USDCAD swings wildly as Trump impacts the forex pair. What are the technicals saying?

The USD/CAD is closely influenced by headline information stemming from the brand new Trump presidency. Yesterday, the pair initially moved decrease, monitoring the USD’s response to the inauguration handle. Nonetheless, the market reacted sharply as feedback and govt orders (EOs) started to floor, notably the suggestion of a 25% tariff on Canadian items beginning February 1. Whereas the result of such insurance policies stays unsure, the prospect induced the USD/CAD to spike larger.

From a technical perspective, latest worth motion has been noteworthy. The pair has been buying and selling inside a “Crimson Field” vary since mid-December, outlined by 1.42899 (low) and 1.4466 (excessive). Though there have been transient breakouts above this vary earlier this month—most notably on U.S. jobs day and once more on Friday—these strikes finally failed, with the worth returning to inside the field.

Trying forward, the important thing resistance lies on the higher boundary of the Crimson Field, between 1.4448 and 1.4466. A sustained transfer above this zone might sign elevated bullish momentum and supply consumers with one other alternative to push larger. Nonetheless, if the resistance holds, a downward correction is feasible, focusing on a cluster of transferring averages (MAs). These embody the 100- and 200-hour MAs, in addition to the 100-bar MA on the Four-hour chart, which converge between 1.4386 and 1.43938. A break under this MA cluster would open the door for a check of the Crimson Field’s decrease boundary at 1.42899.

This text was written by Emma Wang at www.ubaidahsan.com.



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