USDCAD has formed higher lows and higher highs, creating a rising wedge formation visible on its 4-hour chart. Price is currently testing the wedge support at 1.3185 and could be due for a breakout soon. If support holds, price could head back to the resistance at 1.3315.
The 100 SMA is above the longer-term 200 SMA, suggesting that the path of least resistance is to the upside. Also, the short-term moving average lines up with the wedge support, adding to its strength as a floor.
Stochastic is on the move down to show that sellers are in control of price action for now but the oscillator is nearing the oversold region. Once it turns from that area and moves higher, price could follow suit. A break in either direction could result to a move of at least 300 pips, which is roughly the same height as the chart formation.
US and Canadian banks were closed for their respective holiday yesterday, keeping liquidity thin for the pair. However, price was pushed around by movements in crude oil prices, as the commodity got a boost from Russian President Vladimir Putin’s comments on cooperating with the OPEC should they decide to impose a production freeze or cut.
Another informal OPEC meeting is scheduled for the week but Iran and Iraq won’t be attending, which suggests that no major decisions are likely to come from this gathering. Still, a stronger resolve to stabilize prices could lead to another boost for the commodity on this data-light week.
Jobs data from Canada came in better than expected for September, and so did the Ivey PMI reading. There’s not much in the way of top-tier data from Canada this week while the US has the FOMC minutes and retail sales data due later on.