Usdcad On Its Way To Support

last updated on

Usdcad On Its Way To Support

Usd/Cad On Its Way To 1.3600 Support

The USD/CAD pair has adopted a more defensive approach and is seen trading near the 1.3635. The nearest support for the USD/CAD pair is around 1.3600 followed by 1.3580.

The upside in the USD/CAD is stemming from the greenback weakness as the chances of a September rate cut from the US Fed Reserve have increased tremendously. All of this was started by the recent NFP report which showed a weak labor market which will also translate to softer CPI.

Usd/Cad Trades Below 100 Ema

The USD/CAD's H4 chart shows that the bearish trend remains intact below the 100 EMA. Additionally, the RSI also confirms the CAD strength & USD weakness with a reading of 45.70. This means the path of least resistance for the USD/CAD is towards 1.3600.

The 1.3600 support also coincides with the lower limit of the BB (Bollinger Band) which makes it an even more important level. If the 1.3600 level is lost to the USD/CAD bears, it means the next target will be 1.3556.

Conversely, a break of the 1.3650 level will be a sign of short-term trend reversal as it also considers the upper limit of the BB (Bollinger Band). A successful break of the BB's limit will open the doors to 1.3672, where the 100 EMA is located.

Any more buying will lift the USD/CAD pair towards 1.3712, where the 27th June 2024 highs are located. The overall trend of the USD/CAD favors the Canadian Dollar amid a broader USD weakness and the higher chances of rate cuts in the USA.

Additionally, the long-term trend of the USD/CAD is also bearish if we look at the price action on the D1 chart. Once the CPI report is released along with Powell's testimony, a lot more volatility will enter in the USD/CAD.

In general, a dovish stance from Fed Powell will mean yet another leg down for the USD/CAD. Similarly, a hawkish stance will send the USD/CAD pair higher but the chances of that happening are slim.

Trending Stories