Key Highlights
- The US Dollar remains in a downtrend below 1.2540 against the Canadian Dollar.
- There is a key bearish trend line forming with resistance at 1.2480 on the 4-hours chart of USD/CAD.
- A 4-hour close above the 1.2540 level is needed for the greenback to move back in the bullish zone.
- Canada’s Wholesale Sales increased 0.7% in Nov 2017, less than the forecast of +1.0%.
USDCAD Technical Analysis
The US Dollar traded lower during the past three weeks against the Canadian Dollar and tested the 1.2350-60 support. The USD/CAD pair is currently consolidating above 1.2360 and is preparing for the next move.
Looking at the 4-hours chart of USD/CAD, there was a major decline from well above 1.2900 to 1.2350. Later, the pair started a decent recovery, but the upside move was capped by the 1.2580 resistance and the 100 simple moving average (red, 4-hour).
The pair declined and retested the 1.2350-60 support. At the moment, it seems like USD/CAD is consolidating above the mentioned 1.2350-60 support. On the upside, there is a key bearish trend line forming with resistance at 1.2480 on the same chart.
The trend line resistance at 1.2480 is positioned along with the 100 SMA. Therefore, a proper break above the 1.2480 level and 100 SMA is needed for buyers to control.
The next major resistance on the upside is at 1.2540, followed by the 1.2580 swing high. On the downside, the 1.2350-60 support zone is very significant. Should the pair decline below 1.2350, there could be heavy selling pressure on USD/CAD.
Recently, Canada’s Wholesale Sales figure for Nov 2017 was published. There was an increase of 0.7% in sales, less than the forecast of +1.0%. However, the market sentiment was not impacted and USD/CAD remained below the 1.2480 resistance.
Looking at the other majors, EUR/USD is holding ground above the 1.2200 support, and GBP/USD looks set for more gains in the near term.
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