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USD/CAD Restarts Increase, US GDP and ADP Report Next

Key Highlights

  • USD/CAD started a fresh increase from the 1.3200 support zone.
  • It broke a major bearish trend line with resistance near 1.3375 on the 4-hours chart.
  • EUR/USD and GBP/USD corrected gains ahead of the US GDP report release.
  • The US GDP could grow 2.6% in Q3 2022 (Preliminary).

USD/CAD Technical Analysis

The US Dollar found support near the 1.3220 level against the Canadian Dollar. USD/CAD remained well bid and started a fresh increase above the 1.3300 resistance.

Looking at the 4-hours chart, the pair was able to clear the 1.3350 resistance zone and the 100 simple moving average (red, 4-hours). There was also a break above a major bearish trend line with resistance near 1.3375.

The pair surpassed the 50% Fib retracement level of the downward move from the 1.3808 swing high to 1.3227 low. Finally, there was a minor move above the 1.3520 level and the 200 simple moving average (green, 4-hours).

On the upside, the pair is facing resistance near the 1.3585 level. It is near the 61.8% Fib retracement level of the downward move from the 1.3808 swing high to 1.3227 low.

The next major resistance may perhaps be near 1.3670. Any more gains could set the pace for a move towards the 1.3800 resistance zone.

An initial support is near the 1.3480 level. The next major support is near the 1.3400 zone and the 100 simple moving average (red, 4-hours). Any more losses might send the pair towards the 1.3250 support zone.

Looking at EUR/USD, the pair struggled to gain pace above the 1.0480 resistance and started a short-term downside correction.

Economic Releases

  • Euro Zone CPI for Nov 2022 (YoY, Preliminary) – Forecast +10.4%, versus +10.6% previous.
  • Euro Zone CPI for Nov 2022 (MoM, Preliminary) – Forecast +1.5%, versus +1.5% previous.
  • US ADP Employment Change April 2022 – Forecast 200K, versus 239K previous.
  • US Gross Domestic Product for Q3 2022 (Preliminary) – Forecast 2.6% versus previous 2.6%.
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