USD/CAD Forecast – US Dollar Testing Significant Support Vs Canadian Dollar

USD/CAD Forecast – US Dollar Testing Significant Support Vs Canadian Dollar

  • – The US Dollar declined recently and traded near a major support at 1.3110 against the Canadian Dollar.
  • – There was a break below a major connecting bullish trend line with support at 1.3200 on the hourly chart of USD/CAD.
  • – Recently in Canada, the Consumer Price Index (CPI) for June 2018 released by the Statistics Canada.
  • – The outcome was above the forecast of +2.4% as there was a rise in the CPI by 2.5% (YoY).

 

Canada’s Consumer Price Index (CPI)

Recently in Canada, the Consumer Price Index (CPI) for June 2018 released by the Statistics Canada. The market was positioned for a rise of around 2.4% in the CPI in June 2018 compared with the same month a year ago.

 

However, the actual result was above the forecast of +2.4% as there was a rise in the CPI by 2.5% (YoY). Looking at the Core CPI, there was a rise of 0.1% (MoM), compared with the last reading of 0%. Canada’s Retail Sales figure for May 2018 was also released. It posted a rise of 2% (MoM), more than the forecast of +1.1%.

 

The USD/CAD pair declined sharply and traded towards an important support area at 1.3100-1.3110, which prevented further declines.

 

USD/CAD Technical Analysis

The US dollar faced a strong selling interest near the 1.3280 level against the Canadian Dollar. The USD/CAD pair started a downside move and broke a few supports such as 1.3220, 1.3180 and 1.3150 to settle below the 100 hourly simple moving average.

 

USD/CAD Technical Analysis US Dollar Canadian Dollar

 

During the decline, there was a break below a major connecting bullish trend line with support at 1.3200 on the hourly chart of USD/CAD. The pair traded towards a significant support at 1.3100-1.3110, which prevented further slides.

 

The pair started trading in a range above the 1.3115 and is currently trading near 1.3125. On the upside, there is a key resistance formed near 1.3160 and the 23.6% fib retracement level of the last decline from the 1.3289 high to 1.3116 low.

 

A break above the 1.3150 and 1.3160 resistance levels is needed for buyers to gain momentum in the near term. On the flip side, a close below the 1.3100 support could ignite sharp declines in the near term.


Also published on Medium.

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