USD/CAD Edges Higher Amid Weak Rebound – Canadian Dollar Remains Strong

USD/CAD Market Analysis – February 11

USD/CAD edged higher as renewed uncertainty surrounding the United States–Mexico–Canada Agreement (USMCA) weighed on the Canadian Dollar. The pair also found support from upbeat US labor market data, which helped the US Dollar stabilize following its recent weakness. With trade concerns resurfacing and economic fundamentals back in focus, investors are now turning their attention to Friday’s US Consumer Price Index (CPI) release, a key data point that could shape the pair’s near-term direction.

 

USD/CAD Key Levels

Supply Levels: 1.39000 , 1.39300, 1.39600

Demand Levels: 1.38000, 1.37700, 1.37500

USD/CAD Daily Outlook

The USD/CAD pair recently attempted a weak rebound, commonly referred to as a “cat bounce.” The market found support at the 1.3500 level, which helped initiate a short-lived recovery. However, the bullish move was quickly capped as bearish pressure created resistance at 1.3600, causing the recovery to be rejected. Currently, a spinning top candlestick has formed. Although it is green, the substantial upper shadow, lower shadow, and small real body indicate that supply and demand reached equilibrium too quickly in this low-price zone. Overall, the Canadian Dollar still appears to hold relative strength against the US Dollar.

Short-Term Trend

Zooming into the short-term timeframe, we can observe the emergence of a potential support level around 1.3550, which is currently exerting pressure on the resistance at 1.3600. Over the past two to three four-hour sessions, the bulls have successfully defended this support, rejecting bearish attempts and gradually strengthening the level, making it more formidable. However, it is important to note that the bears still retain the upper hand, as the market remains within a broader bearish zone.

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