The Canadian dollar is weakening in the early American session and is reaching the resistance zone of 1.2735 that is the SMA of 21. After having appreciated on Thursday and having found strong support at the EMA of 200 around 1.2640, the pair is now close to breaking the 21-moving average. If it consolidates above, the price could continue the upward movement to 1.2817 level of 5/8 murray.

On the contrary, if this 21 SMA level proves to be very strong, there will be a good opportunity to sell below 1.2735, targeting 1.2695 pivot point and 4/8 murray level and up to the 200 EMA at 1.2640.

We believe that in the short term the USD / CAD pair could trade within a price range between 1.2740 and 1.2640. A consolidation above or below this range could determine the next movement of the pair. Our outlook is bearish as long as it remains below 1.2640. If the bearish force increases and the price consolidates below 1.2630, it could fall to the key support of 2/8 murray at 1.2451.

The strength of the dollar index #USDX is pushing USD / CAD up as it means weakness for the Canadian currency. But the pair is showing signs of exhaustion, given that there is resistance at 93.35. If it fails to break this level, USD / CAD could drop below 1.2735 and it will be positive for the currency.

On the other hand, the president of the Federal Reserve Bank of Cleveland, Loretta Mester, said on Friday that she is in favor of starting trimming asset purchases from November and ending in the first half of 2022. Such moves will help the US dollar to strengthen and in turn could further weaken the loonie. As a result, the currency pair could rise to the psychological level of 1.30 in the medium term.

In the 4-hour chart above, we can see that the eagle indicator has broken the uptrend line after touching the 95 points on September 20. We now see a fall in the trade volume as the bearish force has been increasing. This will be a bearish signal and we will be able to sell in the short term.

Support and Resistance Levels for September 24 - 27, 2021

Resistance (3) 1.2817

Resistance (2) 1.2752

Resistance (1) 1.2714

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Support (1) 1.2656

Support (2) 1.2590

Support (3) 1.2573

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Trading tip for USD/CAD for September 24 - 27, 2021

Sell below 1.2735 (SMA 21) with take profit at 1.2695 and 1.2640 (EMA 200), stop loss above 1.2770.

Buy if the pair rebounds at 1.2640 with take profit at 1.2695 and 1.2735 (SMA 21), stop loss below 1.2605.