On the 4H chart, the USD/CAD pair is trading with a bullish bias. At this moment, it is trading at 1.2777 above last week's highs. After having sharply broken the symmetrical triangle, it has risen by more than 90 pips. This is a bullish sign in the short term.
The Canadian dollar reached the price levels of August 23. It is now located above the 200 EMA and the 21 SMA. The uptrend is prevailing. The pair could continue to rise in the next few hours until the strong resistance of 1.2817, level of 5/8 of Murray.
The US inflation report (CPI) raised the uncertainty about the timing of QE tapering. This gave the US dollar upward strength. Amid the positive correlation, it also gave strength to the Canadian dollar and thus broke the symmetrical triangle pattern.
Meanwhile, in Canada, the federal elections will be held in the next few hours. In the American session, we must be very careful because the volatility of the USD/CAD pair could increase while the market awaits its results.
Since September 9, the Canadian dollar has been trading within this technical pattern supported by the 200 EMA, which acted as a dynamic support. The movements of highs and lows were reducing until there was a sharp break on September 17 by above 1.2680.
For this pattern to confirm the upward movement of the market, there must be a correction towards the level of 1.2695. There is the pivot point of 4/8 of Murray. While it remains above this level, it is expected that there will be an upward movement of the USD/CAD pair and it will be a good buying opportunity above this area.
Our keys for the next few days are to be able to buy if the loonie makes a technical rebound in the 1.2695 area. On the other hand, if the pair fails to consolidate above 1.2817 it will be a good opportunity to sell.
The Eagle indicator is moving above the bullish channel. The Fibonacci indicator shows that the USD/CAD has reached the 61.8% level so this could be a sign of a correction if it remains below 1.2780.
Support and Resistance Levels for September 20 - 21, 2021
Resistance (3) 1,2885
Resistance (2) 1,2864
Resistance (1) 1,2816
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Support (1) 1,2725
Support (2) 1,2680
Support (3) 1,2656
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Trading tip for USD/CAD for September 20 - 21, 2021
Sell below 1,2817, with take profit at 1,2740 and 1,2695 (4/8), stop loss above 1,2853
Buy if the CAD rebounds at 1,2695, with take profit at 1,2740 and 1,2780 (61,8%), stop loss below 1,2660.
The material has been provided by InstaForex Company - www.instaforex.com