Tue, Jan 31, 2023 @ 16:38 GMT
HomeContributorsTechnical AnalysisUSD/CAD Breaks Key Support, Risk of More Downsides

USD/CAD Breaks Key Support, Risk of More Downsides

Key Highlights

  • USD/CAD started a fresh decline from the 1.3685 zone.
  • It traded below a key bullish trend line with support at 1.3585 on the 4-hours chart.
  • EUR/USD could rise above the 1.0650 and 1.0680 resistance levels.
  • Gold price spiked above the $1,825 resistance zone.

USD/CAD Technical Analysis

The US Dollar climbed above the 1.3500 resistance against the Canadian Dollar. USD/CAD even broke the 1.3620 level before the bears appeared.

Looking at the 4-hours chart, the pair traded as high as 1.3705 before it started a fresh decline. There was a clear move below the 1.3650 support zone. Besides, the pair traded below a key bullish trend line with support at 1.3585.

The pair even settled below the 1.3550 level and the 100 simple moving average (red, 4-hours). It traded as low as 1.3484 and tested the 200 simple moving average (green, 4-hours).

On the downside, there is a key support at 1.3500. A downside break below the 1.3500 zone might spark a major decline. The next major support sits near the 1.3420 level. Any more losses might open the doors for a move towards the 1.3350 support zone.

On the upside, an initial resistance is near the 1.3560 level. The next major resistance may perhaps be near 1.3585. A clear move above the 1.3585 resistance might start a steady increase.

In the stated case, USD/CAD may perhaps rise towards the 1.3680 level. Any more gains could lead the pair towards the 1.3800 resistance zone in the coming days.

Looking at gold price, there was a spike above the $1,825 resistance zone, but the price failed to settle above the stated resistance zone.

Economic Releases

  • US Pending Home Sales for Nov 2022 (MoM) – Forecast +0.6%, versus -4.6% previous.
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