USD/CAD Forecast – US Dollar Could Extend Declines Vs Canadian Dollar
- The US Dollar moved down and traded below a major support area at 1.3200-10 against the Canadian Dollar.
- There is a major bearish trend line forming with resistance at 1.3220 on the hourly chart of USD/CAD.
- Recently in the US, the Richmond Fed Manufacturing Index for June 2017 released by Federal Reserve Bank of Richmond posted a rise from 1 to 7.
Richmond Fed Manufacturing Index
Recently in the US, the Richmond Fed Manufacturing Index for June 2017 was released by Federal Reserve Bank of Richmond. The market was positioned for an increase from the last reading of 1 to 4 in June 2017.
However, the actual result was above the forecast, as there was an increase from 1 to 7. The report added that “Among the indexes for expected activity, only two fell: the capital expenditures index declined from 34 in May to 26 in June and the expected shipments metric inched down from 39 to 38.”
The impact on the USD/CAD pair was minimal, and it looks like USD/CAD may soon break 1.3140 for further declines in the near term.
USD/CAD Technical Analysis
The US dollar after trading a few pips above the 1.3300 handle against the Canadian Dollar faced sellers and moved down. The downside move was strong, as the USD/CAD pair broke a major support area near 1.3200-20 on the hourly chart.
The pair even moved very far from the 1.3200 support and the 100 simple moving average to trade as low as 1.3146. The pair recently corrected higher and traded above the 23.6% Fib retracement level of the last decline from the 1.3259 high to 1.3146 low.
The upside move was protected by support turned resistance near 1.3220 and the 50% Fib retracement level of the last decline from the 1.3259 high to 1.3146 low. The pair is once again heading lower and may soon retest the last swing low of 1.3146.
On the upside, the 1.3220-00 levels may continue to prevent gains along with the 100 hourly SMA. Moreover, there a major bearish trend line forming with resistance at 1.3220 forming on the hourly chart, which can be seen as a sell zone in the short term.
