USD/CAD rises to test 1.3450

USD/CAD erased daily losses and limbed back above 1.3400. The pair printed a fresh daily high at 1.3450 but if failed to break higher. It was trading at 1.3430, around Friday’s closing price. 

Markets continue to move in holiday mode. The greenback gained momentum during the last hours and climbed modestly across the board.

Volatility is likely to start rising on Tuesday. Despite being Monday a quiet day, with bank holiday in the US, the economic calendar still shows a busy week ahead that includes the release of the FOMC minutes on Wednesday and on Friday, the official employment reports in the US and also in Canada. 

Levels to watch 

In the short-term resistance levels area seen at 1.3450 (daily high) and 1.3480 (Dec 29 low). While to the downside, support could be seen at 1.3400, 1.3385 (daily low) and 1.3355 (Dec 20 & 21 low). 

“The US dollar initially extended its strong recovery against the Canadian dollar but ran out of steam in front of CAD1.36, where it peaked in November. The pullback in the last two sessions of 2016 was sharp. It retraced 38.2% of the nearly three-week rally to almost the tick in front of CAD1.3400. The RSI has turned lower, and the MACD and Slow Stochastics appear set to turn lower in the coming days. The 50% retracement objective is near CAD1.3340”, said  Marc Chandler from Marc to Market.