USD/CAD: A 4H Technical and Fundamental Analysis
Technical Insight:
The USD has recently weakened, reaching a two-week low against the CAD—a move driven largely by mounting U.S. fiscal concerns.
On the USD/CAD 4-hour time frame, we observed a minor key resistance at 1.3900 and support at 1.3850, the latter of which has already been broken. Following the breakout, price has entered a post-breakout accumulation phase—a typical institutional behavior where orders are layered before a decisive move.
Currently, price appears to be hunting for liquidity—a common market dynamic where early breakout traders are flushed out. There are two zones of interest:
1️⃣ First liquidity pool just above the broken support
2️⃣ Final liquidity pool above key resistance at 1.3900
Should price trigger the second zone, it could present a more strategic area for market participants to reassess positioning based on a favorable risk-reward structure.
📍 Area of Interest (AOI):
The area of interest lies around 1.38830, just below the key resistance and close to the potential liquidity sweep zone. This zone becomes relevant if price hunts the liquidity above the recent high (1.3900) and shows signs of rejection or exhaustion.
🛡 Risk Perspective (Stop-Loss Idea):
From a risk management viewpoint, institutional traders would likely place invalidation levels just above 1.39180, which sits beyond the anticipated liquidity sweep and is considered the upper bound of the stop hunt zone.
🎯 Profit Perspective (Target Idea):
A reasonable profit zone, based on structure, could be placed near the next minor support around 1.38180, where price last found buying interest prior to the breakout.
Fundamental Overview:
Credit Downgrade: Moody’s has downgraded the U.S. credit outlook, raising alarm over rising national debt and fiscal indiscipline.
Treasury Weakness: A poorly received 20-year Treasury auction signals waning investor confidence, pushing yields higher.
Shift in Sentiment: As uncertainty grows, capital is flowing into alternative assets like Bitcoin and gold, both hitting fresh highs—an indication of reduced trust in the dollar’s safe-haven status.
On the flip side, the Canadian dollar (CAD) continues to gain ground:
📈 Why the Loonie Is Rising:
Political Stability: With Mark Carney stepping in post-Trudeau, investor confidence has strengthened amid expectations of prudent fiscal management.
Steady Monetary Policy: The Bank of Canada is expected to maintain current interest rates, reinforcing CAD's appeal.
Stronger Trade Outlook: Ongoing efforts to diversify trade and resolve disputes have contributed to CAD resilience.
📌 Disclaimer:
This is not financial advice. As always, wait for proper confirmation before executing trades. Manage your risk wisely and trade what you see, not what you feel.
Technical Insight:
The USD has recently weakened, reaching a two-week low against the CAD—a move driven largely by mounting U.S. fiscal concerns.
On the USD/CAD 4-hour time frame, we observed a minor key resistance at 1.3900 and support at 1.3850, the latter of which has already been broken. Following the breakout, price has entered a post-breakout accumulation phase—a typical institutional behavior where orders are layered before a decisive move.
Currently, price appears to be hunting for liquidity—a common market dynamic where early breakout traders are flushed out. There are two zones of interest:
1️⃣ First liquidity pool just above the broken support
2️⃣ Final liquidity pool above key resistance at 1.3900
Should price trigger the second zone, it could present a more strategic area for market participants to reassess positioning based on a favorable risk-reward structure.
📍 Area of Interest (AOI):
The area of interest lies around 1.38830, just below the key resistance and close to the potential liquidity sweep zone. This zone becomes relevant if price hunts the liquidity above the recent high (1.3900) and shows signs of rejection or exhaustion.
🛡 Risk Perspective (Stop-Loss Idea):
From a risk management viewpoint, institutional traders would likely place invalidation levels just above 1.39180, which sits beyond the anticipated liquidity sweep and is considered the upper bound of the stop hunt zone.
🎯 Profit Perspective (Target Idea):
A reasonable profit zone, based on structure, could be placed near the next minor support around 1.38180, where price last found buying interest prior to the breakout.
Fundamental Overview:
Credit Downgrade: Moody’s has downgraded the U.S. credit outlook, raising alarm over rising national debt and fiscal indiscipline.
Treasury Weakness: A poorly received 20-year Treasury auction signals waning investor confidence, pushing yields higher.
Shift in Sentiment: As uncertainty grows, capital is flowing into alternative assets like Bitcoin and gold, both hitting fresh highs—an indication of reduced trust in the dollar’s safe-haven status.
On the flip side, the Canadian dollar (CAD) continues to gain ground:
📈 Why the Loonie Is Rising:
Political Stability: With Mark Carney stepping in post-Trudeau, investor confidence has strengthened amid expectations of prudent fiscal management.
Steady Monetary Policy: The Bank of Canada is expected to maintain current interest rates, reinforcing CAD's appeal.
Stronger Trade Outlook: Ongoing efforts to diversify trade and resolve disputes have contributed to CAD resilience.
📌 Disclaimer:
This is not financial advice. As always, wait for proper confirmation before executing trades. Manage your risk wisely and trade what you see, not what you feel.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.