Rally above old ceiling sends the loonie up to the natural resistance level
The 1.2919 area was a ceiling back in October 2017, and again in December. In March 2018, the price broke and raced up to the 1.3000 level, backed off, and raced to the 2018 high at 1.31243, before tumbling lower to 1.2527 in April.
The pair has been moving higher since the bottom in mid-April, but the last few weeks saw the 1.2919 level put a lid on the pair. Near that level is the 50% of the move down from the May 2017 high to the September 2017 low at 1.2926.
That is, until today.
The price has broken above the 1.2919 old ceiling and like in March, went up to test the 1.3000 level (the high today reached 1.2997). We currently trade at 1.2957 - between 1.2919 and 1.3000 technical levels.
I would use those levels as extremes for dip buyers, and rally sellers now (until there is a break). There is also a topside trend line that is moving closer to that 1.3000 level> That trend line is currently at 1.3013 but moving lower each day.
The price of oil is down -$1.87 or -2.64% today which may be helping the CAD weaken today. The NAFTA negotiations are moving along.
The impact of the Iran nuclear deal withdrawal implications are in the details. As a result, it could be a wild ride for oil, and that could also be impactful to the CAD. So follow the clues from the technicals with 1.2919 as the floor and the 1.3000 area as the ceiling.
