USD/CAD consolidates near 1.2650
Following the release of the Canadian CPI and Core Retail sales at 1230GMT on Friday, the US Dollar continued to push higher up to the monthly R1 at 1.2643. The pair has remained slightly below this line on Monday, showing reluctance to move either higher or lower.
This situation suggests that the rate is unlikely to move past the monthly R1 or the two-month high at 1.2652. In case the rate reverses to the downside, it will confirm the existence of a medium-term ascending channel that could guide the pair’s movement during this week.
Thus, the base scenario favours the rate edging lower and approaching the weekly PP at 1.2567. This range is expected to prevail in the upcoming session, as the market should be relatively calm due to lack of data releases with no massive leaps.
This situation suggests that the rate is unlikely to move past the monthly R1 or the two-month high at 1.2652. In case the rate reverses to the downside, it will confirm the existence of a medium-term ascending channel that could guide the pair’s movement during this week.
Thus, the base scenario favours the rate edging lower and approaching the weekly PP at 1.2567. This range is expected to prevail in the upcoming session, as the market should be relatively calm due to lack of data releases with no massive leaps.
Comment:
USD/CAD has been appreciating for the past three trading sessions even despite strongly converging technical indicators, thus being located near the 1.2720 mark mid-Wednesday.
After testing the upper boundary of the senior channel down for several hours, the US Dollar gained strength and made a breakout of this long-term pattern and consequently reached a two-month high at 1.2720.
It is likely that the rate tries to move closer to the weekly R2 at 1.2746, as supported by technical indicators. However, the rate should soon edge lower just to make a rebound from the senior channel circa 1.2640—the area is reinforced by the monthly R1 and the 55-hour SMA circa 1.2640.
USD/CAD has been appreciating for the past three trading sessions even despite strongly converging technical indicators, thus being located near the 1.2720 mark mid-Wednesday.
After testing the upper boundary of the senior channel down for several hours, the US Dollar gained strength and made a breakout of this long-term pattern and consequently reached a two-month high at 1.2720.
It is likely that the rate tries to move closer to the weekly R2 at 1.2746, as supported by technical indicators. However, the rate should soon edge lower just to make a rebound from the senior channel circa 1.2640—the area is reinforced by the monthly R1 and the 55-hour SMA circa 1.2640.
Comment:
After breaching the upper boundary of the senior channel on Tuesday, the USD/CAD made a rebound against the given line and the 55-hour SMA circa 1.2660. The market sentiment shifted significantly mid-Wednesday.
The Loonie fell 129 pips against the US Dollar in the wake of Bank of Canada’s decision to keep its key interest rate target on hold. As a result of this surge, the junior ascending channel was likewise breached.
The rate’s subsequent movement showed lack of volatility to leave a narrow trading range near the 1.2820 mark.
Technical indicators suggest that the US Dollar might remain near its mid-Thursday level, thus being located between the monthly and weekly R2s.
After breaching the upper boundary of the senior channel on Tuesday, the USD/CAD made a rebound against the given line and the 55-hour SMA circa 1.2660. The market sentiment shifted significantly mid-Wednesday.
The Loonie fell 129 pips against the US Dollar in the wake of Bank of Canada’s decision to keep its key interest rate target on hold. As a result of this surge, the junior ascending channel was likewise breached.
The rate’s subsequent movement showed lack of volatility to leave a narrow trading range near the 1.2820 mark.
Technical indicators suggest that the US Dollar might remain near its mid-Thursday level, thus being located between the monthly and weekly R2s.
Comment:
The US Dollar continues its appreciation against the Loonie for the sixth consecutive session.
This increase in value has resulted in the formation of a short-term ascending channel. The rate was showing small volatility since mid-Thursday but was nevertheless driven by strong upside momentum along the upper boundary of this pattern.
The US Advance GDP did not introduce any changes to the market, as the weekly R3 at 1.2863 managed to hold the rate steady.
It is likely that the rates remains in the 1.2900/1.2820 territory within the remaining hours of this trading week, but starts to edge lower on Monday, thus approaching the 55-hour SMA or the weekly R2 at 1.2800 and 1.2764, accordingly.
The US Dollar continues its appreciation against the Loonie for the sixth consecutive session.
This increase in value has resulted in the formation of a short-term ascending channel. The rate was showing small volatility since mid-Thursday but was nevertheless driven by strong upside momentum along the upper boundary of this pattern.
The US Advance GDP did not introduce any changes to the market, as the weekly R3 at 1.2863 managed to hold the rate steady.
It is likely that the rates remains in the 1.2900/1.2820 territory within the remaining hours of this trading week, but starts to edge lower on Monday, thus approaching the 55-hour SMA or the weekly R2 at 1.2800 and 1.2764, accordingly.
Comment:
After reaching a new three-month high at 1.2908, bears took the initiative and dominated the market during the last trading hours on Friday. The rate breached the 55-hour SMA but nevertheless remained stranded in a very narrow between this moving average and the monthly PP.
The same lack of movement might prevail in the following hours until the lower channel boundary near 1.2830 mark is reached. This would put the Greenback between the 100– and 55-hour SMAs.
The rate is likely to remain relatively stable during the next 24 hours, as the strength of both support and resistance could halt any attempts to breach this range.
By and large, traders might expect a breakout south either today or tomorrow, as it seems that the steepness of the upward momentum is no longer sustainable.
After reaching a new three-month high at 1.2908, bears took the initiative and dominated the market during the last trading hours on Friday. The rate breached the 55-hour SMA but nevertheless remained stranded in a very narrow between this moving average and the monthly PP.
The same lack of movement might prevail in the following hours until the lower channel boundary near 1.2830 mark is reached. This would put the Greenback between the 100– and 55-hour SMAs.
The rate is likely to remain relatively stable during the next 24 hours, as the strength of both support and resistance could halt any attempts to breach this range.
By and large, traders might expect a breakout south either today or tomorrow, as it seems that the steepness of the upward momentum is no longer sustainable.
Comment:
The US Dollar did not introduce any changes to its general price level, as it remained below the 55-hour SMA for the second consecutive session. However, the upward-sloping channel was eventually breached, thus revealing increased downside risks.
Worse-than-expected Canadian GDP released at 1230GMT weighted heavily on the Canadian Dollar. As a result, USD/CAD rose 50 pips within the first minute after the release, and the rate was pushed back into the channel.
This bullish sentiment, however, should allay in the upcoming hours, thus allowing bears to dominate the market until the monthly R2 and the 100-hour SMA at 1.2825 are reached.
Taking into account that the upward channel was breached, traders could see the Greenback loosing ground against the Loonie during this week.
The US Dollar did not introduce any changes to its general price level, as it remained below the 55-hour SMA for the second consecutive session. However, the upward-sloping channel was eventually breached, thus revealing increased downside risks.
Worse-than-expected Canadian GDP released at 1230GMT weighted heavily on the Canadian Dollar. As a result, USD/CAD rose 50 pips within the first minute after the release, and the rate was pushed back into the channel.
This bullish sentiment, however, should allay in the upcoming hours, thus allowing bears to dominate the market until the monthly R2 and the 100-hour SMA at 1.2825 are reached.
Taking into account that the upward channel was breached, traders could see the Greenback loosing ground against the Loonie during this week.
Contrary to expectations, USD/CAD did not initiate a retreat from the upper channel boundary but still managed to edge higher, even despite technical indicators that are clearly going south. As a result, the US Dollar pushed above the monthly R1 and reached a two-month high at 1.2663.
Given that the rate has surpassed this monthly pivot point, bulls might still want to push up to the weekly R1 at 1.2685. This resistance, however, should be considered as the ultimate intraday high, as the pair should eventually move lower.
In addition, the daily chart demonstrates the existence of a medium-term descending channel. The rate is currently testing the upper boundary of this dominant pattern, thus adding some ground to the overall bearish sentiment.