Usdcad To Close The Week In Red

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Usdcad To Close The Week In Red

Usd/Cad To Close The Week In Red

According to Scotiabank's economists, the USD/CAD will likely close the week in red as the Canadian Dollar flexes its muscles.

Given the current technical and fundamental outlook, the USD/CAD pair will likely move towards the area between 1.3290 - 1.330 which is almost a drop of 100 pips from the current prices. According to Scotiabank, the USD/CAD will move into this area in the next 1 to 2 weeks.

The trading session on Wednesday was very choppy for the USD/CAD. However, this still needs to change the fact that USD/CAD is all set to close the week in red. After all, USD/CAD is already trading below the 40 SMA on the D1 located near the 1.3398.

1.3415 Remains A Key Resistance

In addition, the pair will also likely form a double top near 1.3415 if it attempts another leg higher. A look at the USD/CAD weekly chart suggests that a bearish pattern known as engulfing is in the making.

The USD/CAD support on the intraday timeframe shows that resistance is present in the 1.3390 - 1.3400 area. Similarly, support between 1.3350 and 1.3360 (10 pip area) can be found. That's why the USD/CAD is expected to bounce proud in 40-50 pips during intraday.

If we look at Scotiabank's analysis for USD/CAD aside for a moment, there's no denying that the pair has shown weakness during Friday's session. Experts have hinted that the DXY is experiencing selling pressure after the release of the NFP.

Returning to the Scotiabank forecast, it is also important to note that moving beyond the measured double-top target will change the whole scenario. In this case, the USD/CAD will turn bullish, which will be exactly opposite of what the Scotiabank is trying to forecast.

However, any comments from the Fed and Canadian central bank could also significantly affect the USD/CAD price action. If the rate cut is announced by the Canadian central bank first, the USD/CAD could reverse direction and start moving higher.

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