USD/CAD has produced quite a deep sea of ​​volatility over the past week, and trading conditions this week could provide additional opportunities for those willing to bet.

USD/CAD is trading near 1.29750 at the time of writing. However on the 14^e In July, the USD/CAD currency pair climbed to near 1.32208 with a fairly rapid wave of trading as financial institutions reacted to Bank of Canada moves and US economic data. Traders who got caught up in the whirlwind of volatility last week may want to brace themselves for further medium-term storms and may find additional opportunities to bet on USD/CAD swings.

Commodity prices are down at the moment and this is influencing the Canadian dollar

The highs hit by USD/CAD in the middle of last week hit highs last seen in November 2020, but the Forex pair apparently managed to hit some pretty robust resistance and produce a reversal lower. This morning’s trading saw the USD/CAD selloff decline slightly, and the possibility of falling below the 1.30000 level is significant and should be taken as an indicator today and tomorrow.

• The Bank of Canada raised its key rate by 0.75% last week, essentially matching hawkish rhetoric from the US Fed.
• Concerns about a global recession are priced into the speculative trade in the USD/CAD currency pair.

Technically, if USD/CAD is able to maintain its current position below 1.30000, some speculators may be tempted to try selling short. However, traders should keep in mind that USD/CAD has persisted in a strong uptrend and this move has probably not seen its last days yet.

Although the Bank of Canada mirrored the US Federal Reserve on a 0.75% interest rate hike last week, Canada is also being hit by concerns over falling commodity prices, which means that volume demand for the Canadian dollar may decline in international trade. Reactions from financial institutions could produce more volatile moves for USD/CAD this week as they seek price equilibrium.

More choppy conditions are likely to be demonstrated and traders should be cautious

USD/CAD has proven to produce choppy conditions, but support levels have spurred further buying over the past few months. If USD/CAD can maintain its current price range and the 1.29650 level is held, it could prompt the idea that additional room for higher moves could again be generated in the near term.

USD/CAD’s ability to climb above 1.30000 last week led to sustained price action until reaching the 1.32000 junction. Another move above 1.30000 could happen in the short term without too much of a surprise..

Short-term outlook for the Canadian dollar

Current resistance: 1.29980

Current support: 1.29580

High target: 1.30916

Low target: 1.28900

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