Key Highlights
- USD/CAD started a fresh increase above the 1.2500 resistance zone.
- It broke a major bearish trend line at 1.2540 on the 4-hours chart.
- EUR/USD started a fresh decline after it failed to surpass 1.1800.
- Canada’s CPI could increase 3.4% in July 2021 (YoY), up from 3.1%.
USD/CAD Technical Analysis
The US Dollar formed a support base above 1.2420 against the Canadian Dollar. As a result, USD/CAD started a fresh increase above the 1.2500 resistance.
Looking at the 4-hours chart, the pair gained pace after it cleared the 1.2500 resistance zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
There was also a break above a major bearish trend line at 1.2540. The pair tested the 50% Fib retracement level of the key decline from the 1.2807 high to 1.2421 low.
On the upside, an initial resistance is near the 1.2660 level. It is close to the 61.8% Fib retracement level of the key decline from the 1.2807 high to 1.2421 low. Any more gains could open the doors for a move towards the 1.2750 level.
If there is a downside correction, the pair might to remain stable above 1.2580. The main support is now forming near the 1.2540 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Looking at EUR/USD, the pair started a fresh decline after it failed to clear the 1.1800-1.1810 resistance zone. Similarly, GBP/USD is showing bearish signs below 1.3800.
Economic Releases
- UK Consumer Price Index for July 2021 (YoY) – Forecast +2.2%, versus +2.5% previous.
- UK Core Consumer Price Index for July 2021 (YoY) – Forecast +2.2%, versus +2.3% previous.
- Euro Zone CPI for July 2021 (YoY) – Forecast +2.2%, versus +2.2% previous.
- Euro Zone CPI for July 2021 (MoM) – Forecast -0.1%, versus +0.3% previous.
- Canadian Consumer Price Index for July 2021 (MoM) – Forecast +0.3%, versus +0.3% previous.
- Canadian Consumer Price Index for July 2021 (YoY) – Forecast +3.4%, versus +3.1% previous.
