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Will OPEC and friends extend their output cut deal?

I’m taking a look at USD/CAD for a possible dip today.

What do you think?

USD/CAD Trade Idea

USD/CAD 1-hour Forex Chart
USD/CAD 1-hour Forex Chart

In case you missed it, the dollar gained a couple more pips against the Loonie on (correct) speculations that Ontario will return to lockdown over the weekend.

It also didn’t help that OPEC had just lowered its global demand forecasts for 2021 as fresh lockdown restrictions dent the global economic recovery’s momentum.

USD/CAD has not only broken above a tight consolidation at 1.2550, but it also looks like it’s gunning for the 1.2600 major psychological handle.

As you can see, 1.2600 is also around the 1-hour 100 SMA as well as a trend line that USD/CAD bulls and bears have been respecting since mid-March.

Will the trend line serve as resistance today? Profit-taking could weigh on the dollar ahead of the Easter holidays. More importantly, markets expect OPEC and friends to announce an extension to their production cut deal, which could support crude oil and CAD in the charts.

I’ll be looking to short at 1.2600 as soon as I see that the resistance would hold. 1.2550 is a good intraday target though I’m willing to hold until 1.2525 if I see enough bearish momentum.

If the dollar finds more buyers, though, then I’ll be waiting for USD/CAD to trade (and hold!) above the broken trend line support. 1.2640 is a pretty good initial target but I’ll also consider holding or taking partial profits if we see a strong bullish momentum.

How about you? Do you think sellers will jump in at 1.2600? Or will the dollar continue to gain against the Loonie?

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