Key Highlights
- USD/CAD started a fresh increase after testing the 1.2470 support region.
- A major declining channel is forming with resistance near 1.2610 on the 4-hours chart.
- EUR/USD and GBP/USD extended gains before correcting lower.
- Canada’s CPI could increase 2.3% in March 2021 (YoY), up from 1.1%.
USD/CAD Technical Analysis
The US Dollar failed to clear the 1.2650 resistance against the Canadian Dollar. As a result, USD/CAD declined towards the 1.2470 zone, where it found support and recovered higher.
Looking at the 4-hours chart, the pair followed a bearish path from the 1.2647 high. Earlier, there was a downside break below the 1.2600 and 1.2580 support levels. The pair even traded below the 50% Fib retracement level of the key upward move from the 1.2365 low to 1.2647 high.
However, the pair remained well bid near 1.2470 and it started a fresh increase. It seems like the 61.8% Fib retracement level of the key upward move from the 1.2365 low to 1.2647 high acted as a strong support.
It broke many hurdles near the 1.2550 resistance zone. There was also a close above the 1.2580 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
It seems like there is a major declining channel forming with resistance near 1.2560 on the same chart. A clear upside break above the channel resistance could open the doors for a move towards the 1.2650 level.
On the downside, there is a key support forming near the 1.2550 level. The next major support is near the 1.2470 region. Any more losses could open the doors for a move towards the 1.2400 support zone.
Overall, USD/CAD might could accelerate higher if it settles above 1.2600 and 1.2610. Besides, EUR/USD climbed higher towards 1.2080 before correcting lower. Similarly, GBP/USD struggled to clear the 1.4000 resistance zone.
Economic Releases
- UK Consumer Price Index for March 2021 (YoY) – Forecast +0.8%, versus +0.4% previous.
- UK Core Consumer Price Index for March 2021 (YoY) – Forecast +1.1%, versus +0.9% previous.
- Canadian Consumer Price Index for March 2021 (MoM) – Forecast +0.6%, versus +0.5% previous.
- Canadian Consumer Price Index for March 2021 (YoY) – Forecast +2.3%, versus +1.1% previous.
