The USD/CAD pair is trading within a downtrend channel below 4/8 of murray and above the EMA of 200 and the SMA of 21. Since September 23, it has been trading within a sloping range, a breakout above 1.2700 could define the next move for the pair.
According to the 4-hour chart, his accumulation below 1.2695 and below 4/8 of murray could originate strong bullish momentum. We can say that this may happen because the eagle indicator is showing bullish signs and the pair is above the 200 EMA which supports our outlook.
On the other hand, a factor that can support our signal to buy above 1.2700 is that the US dollar has regained positive traction and has shot to the highest level since early November 2020. At this time of writing, it is breaking the strong resistance at 93.75 and could continue to rise.
According to the daily chart, the US dollar index is below the 200 EMA located at 94.04. A sharp breakout could further weaken the USD/CAD pair which could move to the level of 1.2817. Therefore, we should expect a firm breakout above 1.2595 and buy only if the price consolidates above this level.
As the loonie is trading above the SMA of 21 and the EMA of 200, it is obvious that the market force is bullish. So if it makes a correction towards 1.2655 (21 SMA), it will be an opportunity to buy. On the other hand, a firm breakout above 4/8 murray will be a signal to buy with targets at 1.2817 (5/8) in the short term.
Support and Resistance Levels for September 28 - 29, 2021
Resistance (3) 1.2772
Resistance (2) 1.2726
Resistance (1) 1.2695
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Support (1) 1.2659
Support (2) 1.2612
Support (3) 1.2573
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Trading tip for USD/CAD for September 29 - 30, 2021
Buy if CAD breaks above 1.2695 (4/8) with take profit at 1.2750 and 1.2817 (5/8), stop loss below 1.2655.