HomeContributorsTechnical AnalysisUSD/CAD Holds Support But Can It Recover?

USD/CAD Holds Support But Can It Recover?

Key Highlights

  • USD/CAD declined heavily and tested the 1.3330 support.
  • A key rising channel is forming with support near 1.3350 on the 4-hour chart.
  • EUR/USD is trading above the 1.0950 support and might climb higher.
  • The BoE interest rate decision is scheduled today (forecast 4.5%, versus 4.25% previous).

USD/CAD Technical Analysis

The US Dollar started a strong decline from the 1.3640 zone against the Canadian Dollar. USD/CAD traded below the 1.3480 level to move into a bearish zone.

Looking at the 4-hour chart, the pair settled below the 1.3400 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

Finally, the bulls took a stand near the 1.3330 support. A low is formed near 1.3314 and the pair is now consolidating losses. There is also a key rising channel forming with support near 1.3350 on the same chart.

Immediate resistance on the upside is near the 1.3420 level. The next key resistance is near the 1.3450 level. The main resistance sits near 1.3480 and the 100 simple moving average (red, 4 hours).

A clear upside break and close above the 1.3480 resistance might start another steady increase. The next key resistance is near the 1.3550 zone. Any more gains might send the pair toward 1.3640.

On the downside, the pair might find bids near 1.3340. The next major support is near the 1.3320 level. If there is a downside break below the 1.3420, the pair could test the 1.3250 level.

Looking at EUR/USD, the pair is still trading in a positive zone above 1.0950 and might attempt a fresh increase in the near term.

Economic Releases

  • BoE Interest Rate Decision – Forecast 4.5%, versus 4.25% previous.
  • US Initial Jobless Claims – Forecast 245K, versus 242K previous.
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