On the daily chart below for USDCAD,
we can see that the bearish trend remains intact, and the moving
averages are acting as resistance for the sellers. The latest pullback is
finding resistance at the previous swing low level at 1.3405 and the blue short
period moving average.
This pullback started as the US
Retail Sales report missed expectations across the board and
kicked a move higher in the USD as it’s the preferred currency in times of
recessions. The momentum was boosted further by hawkish comments from Fed’s
Waller and the 1
year inflation expectations in the University of Michigan survey showing a big
jump to the upside. The sellers are still eyeing the support at 1.3225.
USDCAD technical analysis
On the 4 hour chart below, we can
see that the bearish momentum to the downside is waning as depicted by the divergence of the price with the MACD. This divergence into the major
support at 1.3225 may be a bad omen for the sellers. For now, the sellers are
in control though. The price is now at the previous swing low level and the
38.2% Fibonacci
retracement level with the trendline defining the bearish trend. The
buyers will need a break above the trendline to get the conviction to start
charging higher and target the resistance at 1.3553.
On the 1
hour chart below, we can see more closely the current price action around the
resistance. As mentioned above, the buyers will want a break above the
trendline before piling in, while the sellers should use that zone as the last
line of defence. In the near-term, a break below the swing support at 1.3343
should see sellers piling in and target the support at 1.3225.
This article was written by ForexLive at www.forexlive.com.
http://dlvr.it/SmjqBm
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