USD/CAD Resistance Battle: Long-Term Buy or Short-Term Sell?

By Tomasz Wisniewski|

Published: November 07 2024, 06:34 GMT+0

USD/CAD Resistance Battle: Long-Term Buy or Short-Term Sell?

The American Dollar to Canadian Dollar (USD/CAD) pair has shown remarkable strength over the past five weeks, experiencing a sustained bullish trend. However, this week, we are witnessing a pause in that momentum, marked by significant volatility at the current highs. The resistance level at 1.395 has become the focal point of this analysis, as it has historically proven to be a formidable barrier.

This key resistance was initially established in 2022, where the pair faced a sharp reversal, and it was tested again in 2024, reinforcing its importance. Currently, the price is attempting to breach this critical zone but is struggling to maintain momentum above it, indicating potential exhaustion in the bullish run.

If the price decisively bounces off this resistance and forms a clear bearish reversal pattern, it would signal a strong opportunity to sell. In this scenario, the first target for sellers would be the black uptrend line, which has been a reliable support level throughout the recent uptrend.

Conversely, should the price manage to break and sustain a move above the 1.395 resistance, it would provide a long-term buy signal, opening the way for further upside potential.

Traders should closely monitor the market’s reaction at this resistance level to identify potential breakout or rejection signals that could set the direction for the coming weeks.

Source: https://www.axiory.com/analytics/technical-analysis/usd-cad-resistance-battle-long-term-buy-or-short-t

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