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The USDCAD continues to trade in a range that has been in place since the pair closed above 1.2670 on October 25. It looked like buyers were ready for the next leg higher early this week, but apparently sellers had other plans.
Thursday’s 85 pip selloff puts prices back in the lower half of the 240 pip range. In fact, this week is shaping up as a quasi-bearish engulfing candle (using the range instead of the open and close).
It will be interesting to see whether the USDCAD can break loose next week. It’s no secret that the week between Christmas and New Year’s Day is one of the least active all year. Breakouts aren’t very common during this time due to the lack of volume.
If it does occur next week, I’ll stand aside. However, if we get a break from this range after the new year, it’s fair game, at least for my part.
A daily close at 5 pm EST (New York close charts) above 1.2910 would expose 1.3160. Alternatively, a daily close below the range floor at 1.2670 would pave the way for a move toward the July lows at 1.2420.
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