Key Highlights
- USD/CAD started a downside correction from 1.2675.
- It traded below a major bullish trend line at 1.2580 on the 4-hours chart.
- EUR/USD could attempt a move above 1.0900, and GBP/USD is facing hurdles near 1.3080.
- The Canadian CPI increased 6.7% in March 2022 (YoY), up from 5.7%.
USD/CAD Technical Analysis
The US Dollar attempted an upside break above 1.2700 against the Canadian Dollar. However, USD/CAD failed near 1.2675 and started a downside correction.
Looking at the 4-hours chart, the pair traded the 1.2620 support level and the 200 simple moving average (green, 4-hours). There was a break below a major bullish trend line at 1.2580.
The pair declined below the 50% Fib retracement level of the upward move from the 1.2402 swing low to 1.2676 high. It settled below the 1.2560 support and the 100 simple moving average (red, 4-hours).
The next major support is near the 1.2465 level. It is near the 76.4% Fib retracement level of the upward move from the 1.2402 swing low to 1.2676 high. Any more losses may perhaps open the doors for a move towards the 1.2400 level.
On the upside, USD/CAD might face resistance near the 1.2565 level and the 100 simple moving average (red, 4-hours). The next major resistance is seen near the 1.2620 level.
Fundamentally, the Canadian Consumer Price Index (CPI) for March 2022 was released yesterday by the Statistics Canada. The market was looking for an increase of 6.1%, compared with the same month a year ago.
The actual result was above the market forecast, as the Canadian Consumer Price Index increased 6.7%. The monthly change was 1.4%, up from the last 1%.
Looking at EUR/USD, the pair could attempt a recovery wave above the 1.0900 and 1.0920 resistance levels. Similarly, GBP/USD must clear 1.3080 for a steady increase.
Economic Releases
- US Initial Jobless Claims – Forecast 180K, versus 185K previous.
- Fed’s Chair Powell speech.
