USDCAD Resistance Levels The current rise in USDCAD is supported by technical factors. To confirm the recovery, it’s important to maintain trading above the 100-hour moving average (MA). If this level is broken, the rally may only be a pause in a larger downward trend. Options Strategies for USDCAD According to Michalowski’s analysis, the 100-hour moving average is a key point for options strategies. The bounce from the 1.3594 support area was strong, but the real challenge is at the 1.3656 resistance level. This creates chances for significant movement in either direction. For those expecting a breakout, buying call options with a strike price just above 1.3660 seems wise. This is supported by the different policies of central banks: the Bank of Canada cut interest rates in June, while the US Federal Reserve kept rates steady. This difference generally favors a stronger U.S. dollar, encouraging bulls to anticipate a rise. On the other hand, if the resistance holds, buying put options can provide a way to profit from a potential downturn. This bearish outlook is reinforced by recent U.S. economic data, where retail sales in June increased by only 0.1%. This suggests a cooling U.S. economy, which could limit the dollar’s rally and push the pair lower, supporting the broader downward trend mentioned earlier. Given the uncertainty at this critical point, a long straddle could be a good strategy for traders expecting a sudden move but unsure of the direction. Canada’s latest inflation report for May unexpectedly rose to 2.9%, adding unpredictability to the central bank’s next steps and setting up potential volatility in the currency. This makes betting on a significant price swing, rather than a specific direction, a sensible strategy. For a more cautious income strategy, we might sell a bull put spread with a short strike below the 1.3588 support level. This position would generate a premium and be profitable as long as the key support level holds in the coming weeks. It allows us to benefit from the buying interest at lower levels without needing a large increase in price. Create your live VT Markets account and start trading now.

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