1.34 eyed as possible resistance, traders...
USD/CAD:
The Bank of Canada held rates at 1.75% Wednesday, as widely expected. The central bank stated rates will have to increase to a neutral range in order to achieve its inflation target, noting downward historical revisions to GDP and recent macro developments indicate there may be more room for non-inflationary growth. The impact witnessed the USD/CAD market print a sharp increase in value, ripping through orders at 1.33 and H4 resistance at 1.3329 (now acting support), leaving price free to challenge 1.34/H4 channel resistance (extended from the high 1.3317).
The combination of the round number 1.34, H4 channel resistance and the RSI indicator displaying a divergence/oversold reading is likely appealing for sellers. It becomes even more tempting as traders realize 1.34 fuses nicely with the lower edge of weekly supply coming in at 1.3540-1.3387. The only drawback we see from here, aside from the US dollar index recently conquering 97.00 to the upside, is the fact daily price shows potential to explore ground as far north as resistance drawn from 1.3533.
Areas of consideration:
Keep a close eye on 1.34 today for possible shorting opportunities. The research team has recommended waiting for additional candlestick confirmation prior to pulling the trigger simply due to the strength of the US dollar at the moment and the fact daily price displays room to explore higher ground. A bearish candlestick formation printed from 1.34 helps traders define entry/stop-loss parameters and also helps recognize whether or not there are sellers committed to the area.
Downside targets from 1.34 rest at daily support taken from 1.3347, followed by H4 support at 1.3329.
Today’s data points: US ADP Non-Farm Employment Change; US ISM Non-Manufacturing PMI; FOMC Member Bostic Speaks; Canadian Trade Balance; BoC Gov Poloz Speaks.
The Bank of Canada held rates at 1.75% Wednesday, as widely expected. The central bank stated rates will have to increase to a neutral range in order to achieve its inflation target, noting downward historical revisions to GDP and recent macro developments indicate there may be more room for non-inflationary growth. The impact witnessed the USD/CAD market print a sharp increase in value, ripping through orders at 1.33 and H4 resistance at 1.3329 (now acting support), leaving price free to challenge 1.34/H4 channel resistance (extended from the high 1.3317).
The combination of the round number 1.34, H4 channel resistance and the RSI indicator displaying a divergence/oversold reading is likely appealing for sellers. It becomes even more tempting as traders realize 1.34 fuses nicely with the lower edge of weekly supply coming in at 1.3540-1.3387. The only drawback we see from here, aside from the US dollar index recently conquering 97.00 to the upside, is the fact daily price shows potential to explore ground as far north as resistance drawn from 1.3533.
Areas of consideration:
Keep a close eye on 1.34 today for possible shorting opportunities. The research team has recommended waiting for additional candlestick confirmation prior to pulling the trigger simply due to the strength of the US dollar at the moment and the fact daily price displays room to explore higher ground. A bearish candlestick formation printed from 1.34 helps traders define entry/stop-loss parameters and also helps recognize whether or not there are sellers committed to the area.
Downside targets from 1.34 rest at daily support taken from 1.3347, followed by H4 support at 1.3329.
Today’s data points: US ADP Non-Farm Employment Change; US ISM Non-Manufacturing PMI; FOMC Member Bostic Speaks; Canadian Trade Balance; BoC Gov Poloz Speaks.
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