USD/CAD Could Recover If It Breaks 1.2650, BoC Next

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Key Highlights

  • USD / CAD formed a support base above 1.2500 and climbed higher.
  • It broke a major bearish trend line with resistance near 1.2570 in the 4-hour chart.
  • EUR / USD correct gains of 1.1900.
  • GBP / USD also corrected lower after it failed to surpass 1.3900.

USD / CAD Technical Analysis

The US dollar extended its decline below 1.2600 against the Canadian dollar. However USD / CAD has formed a base close to 1.2500 and has recently started an upward correction.

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Looking at the 4-hour chart, the pair traded as low as 1.2493 before it started an upward correction. There was a break above the 1.2550 and 1.2580 resistance levels.

The pair even released a major bearish trend line with resistance near 1.2570. There was a break above the 50% Fib retrograde level of the downward movement from the 1.2708 swing high to 1.2493 swing low.

The pair was able to set above 1.2600 and the 200 simple moving average (green, 4-hours). It now faces resistance near 1.2655, which is close to the 76.4% Fib retrofit level of the downward movement from the 1.2708 swing high to 1.2493 swing low.

A close above 1.2650 and 1.2655 could open the doors for steady growth. If not, the pair could start another decline below 1.2600. The next major support is near 1.2550, below which the bears could target more losses.

Looking at EUR / USD, the pair failed to hold gains and extended its decline below the 1.1865. Similarly, GBP / USD traded below the key 1.3800 support zone.

Economic Editions

  • BoC Interest Rate Decision – Forecast 0.25%, vs. 0.25% previous.
  • Belgian Fed Book.

Source

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