The USD/CAD has packed plenty of price action in the past few days of trading and volatility is likely to continue as ‘fair’ equilibrium is sought.

As of this writing the USD/CAD currency pair is near the 1.285750 mark.  On the 4^th of August the USD/CAD was trading near lows of 1.28200, coming within sight of support seen in the last week of July and but not coming anywhere near the low on the 1^st of August which touched 1.27675. On the 5^th of August the USD/CAD soared to nearly 1.29880, but then reversed lower before going into the weekend.

Monday’s move towards Lows may Raise Eyebrows of USD/CAD Speculators

Intriguingly yesterday’s trading in the USD/CAD also produced another selloff and the currency pair actually consolidated between 1.28480 and 1.28650 for a lot of the day. This morning’s trading has seen the USD/CAD essentially sustain these lower marks, which were last traded in a sincere way on the 4^th of August. The spike upwards on Friday via buying in the USD/CAD happened after the Average Hourly Earnings data showed an uptick in payroll spending, per my interpretation of Forex.

• Volatility continues to be a minefield in the USD/CAD for day traders, and risk management certainly is needed.
• The USD/CAD is testing lows seen on the 4^th of August, which may entice speculators who believe the currency pair is momentarily oversold.

The notion that the USD/CAD spiked higher on strong buying Friday, and then reversed lower may be seen as a pure technical move proving the Forex pair was overbought. However, some speculators may look at the current value of the USD/CAD as it traverses important support and suspect the currency pair may actually now be oversold. Choppy conditions are likely to be demonstrated in the coming days.  

If the USD/CAD starts to trade within a Narrow Range this may Prove Attractive

Traders who are cautious may want to see if current support levels can hold. If the USD/CAD can stay within the 1.28570 to 1.28600 zone for a time, this may prove to be a rather interesting ignition point to launch trades. However, day traders should probably look for quick hitting trades that are not overly ambitious.  The use of conservative leverage and a slightly wider stop loss, compared to a relatively close take profit target may prove to be worthwhile.

Consolidation may prove to be favorable in the near term as financial houses interpret the tea leafs from the U.S Federal Reserve. Traders looking to take advantage of support levels may want to place buying positions near support around the 1.28565 to 1.28550 vicinity to look for upside momentum.

Canadian Dollar Short-Term Outlook

Current Resistance: 1.28650

Current Support: 1.28555

High Target: 1.28970

Low Target: 1.28212

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The USD/BRL has reacted to Monday’s early lower depths with a rather swift punch upwards which essentially creates more speculative opportunities.

The USD/BRL is situated near the 5.2778 realm as of this writing, but this is before the currency pair opens for trading today. Having hit a low of 5.1216 on Monday the USD/BRL has fought its way higher. The depths explored earlier this week last traded sincerely around the same values during the third week of June.

Traders of the USD/BLR as always should be ready for some type of opening spike and should wait until the market has initiated to pursue the currency pair in order to let things calm down for a moment.

Entry prices orders should be used when trading the USD/BRL to make sure price fills are within reason. Trading volumes in the USD/BRL currency pair are sometimes light which can lead to expectations not being met while opening a position. The USD/BRL is now close to perceived technical resistance. Intriguingly, the current value of the Forex pair is near important lows generated the day before last week’s U.S Fed interest rate hike.

USD/BRL resting near Important Resistance which should be watched

It may come as a surprise if the USD/BRL were to break current resistance with a sustained effort, but if this occurs it is likely a sign that large financial houses are acting on transactions the public is not aware of regarding business enterprises. Speculators’ who have the courage to step in and sell the USD/BRL at its current levels, after the currency pair opens today, may be making a bold but wise choice. If current resistance is proven to be rather durable it may serve as a solid launching point for short positions. 

Traders however need to be careful because although the USD/BRL did test significant support on Monday, the move upwards also highlighted questions which remain about the global economic picture. The U.S Fed is likely to continue raising interest rates, the lack of clarity regarding U.S inflation data and growth numbers could continue to foster dynamic trading conditions which cause volatility.

• Technically it will prove interesting to see if the 5.2000 to 5.2900 ratios can develop as a solid trading range for the USD/BRL.
• If current resistance proves weak this could mean financial houses are not comfortable regarding economic outlook and remain skeptical, which could produce additional buying of the USD/BRL.

Final Thoughts about Current Trading Perceptions:

The range the USD/BRL is now within should be watched carefully.  If current resistance levels prove adequate this could be a solid bearish signal for the USD/BRL. However, nervous sentiment is still strong within the global markets and volatility may continue to be seen near term. Risk management is essential. Traders looking for lower prices via selling positions should use realistic targets and not be overly ambitious.

Brazilian Real Short-Term Outlook

Current Resistance:  5.2885

Current Support:  5.2575

High Target: 5.3217

Low Target:  5.1859

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