USD/CAD long-term technical analysis

OPEC effort to bring oil prices higher meet with dismay as oil prices tumbled on China coronavirus issue. The price drop happen at the beginning of 2020 and wiped more than 20% of the oil price value. At the current time, the market cautiously monitors the activity in China as the country returns to production after weeks of quarantine.

Countries and companies report next month will provide the severity of the cases to the economy. If the situation persists then USD/CAD might start a new bullish leg higher.

New Month

Monthly chart

USD/CAD mostly traded between 1.3000 – 1.3250 for several months with few closes outside of the range. At the current time, the pair attempting to move higher in response to oil weakness and U.S dollar strength. If the situation got worse in China then USD/CAD might start moving higher and target 1.3725.

Weekly chart

USD/CAD movement capped inside 1.3000 – 1.3330. The price traded back and forth inside the range and traders could use the moment to trade the range. However, there is an expectation of weak oil demand in the future which might point to further weakness in CAD. Traders might want to consider a bullish breakout scenario too if the weak oil prices environment continues.

Daily chart

USD/CAD outlook on the daily chart is similar to the higher time-frame charts. The pair weaken following the weakness in oil prices. Further clue on the next direction needed. However, traders and investors will closely monitor the situation in China by the end of March. Without major improvement then USD/CAD might breakout above the resistance level 1.3330.

Trade plan

Short positions could be considered near 1.3330 when there is a major bearish pattern. However, traders might want to be careful as the fundamental situation might not support it. On the other hand, if the pair make bearish correction toward 1.3000 then traders could prepare to enter long positions.

Technically, without a breakout of 1.3000 – 1.3330 then USD/CAD expected to continue its ranging movement.