Key Highlights
- USD/CAD started a downside correction from the 1.3420 resistance zone.
- It broke a key bullish trend line with support at 1.3275 on the 4-hours chart.
- Crude oil price gained bullish momentum and surpassed the $40.00 resistance.
- Both EUR/USD and GBP/USD are struggling to clear important hurdles.
USD/CAD Technical Analysis
This past month, the US Dollar made a few attempts to surpass the 1.3420 resistance against the Canadian Dollar, but it failed. USD/CAD corrected lower below 1.3350, but it is now approaching a crucial support zone.
Looking at the 4-hours chart, the pair traded below the 1.3350 and 1.3300 support levels. There was also a break below a key bullish trend line with support at 1.3275.
More importantly, there was a break below the 100 simple moving average (red, 4-hours), and the 50% Fib retracement level of the upward move from the 1.3137 low to 1.3418 high.
The pair is now trading near important supports such as 1.3245. It is close to the 61.8% Fib retracement level of the upward move from the 1.3137 low to 1.3418 high. The next key support is near the 1.3200 level and the 200 simple moving average (green, 4-hours).
Any further losses could lead the pair towards the 1.3145 support level. Conversely, the pair might start a fresh increase above 1.3300 and the 100 SMA. The next resistance is near 1.3350, above which the pair could make another attempt to clear the 1.3420 resistance zone.
Overall, USD/CAD is holding important supports and it could start a fresh increase above 1.3300. Looking at EUR/USD and GBP/USD, both are struggling to gain momentum above 1.1800 and 1.3000 respectively.
Upcoming Economic Releases
- Germany’s Industrial Production August 2020 (MoM) – Forecast +1.5%, versus +1.2% previous.
- Canada’s Ivey PMI Sep 2020 – Forecast 66.6, versus 67.8 previous.
- FOMC Meeting Minutes.
