USD/CAD Technical Analysis | Forexlive
On the daily chart below, we can
see a possible descending
triangle with the base at 1.3225. The price can break out on either side, so the
fundamentals will help with deciding which way to go. As can be seen in other
major pairs, there’s a lot of uncertainty in the market causing some ranging
price action.
On one hand we have those that
see inflation falling with the global economy remaining resilient and then
returning to growth with future rate cuts, on the other hand we have those that
see inflation remaining above the central bank target requiring more tightening
and eventually guaranteed hard landing.
Only time and economic data will
tell who’s right here.
On the 4 hour chart below, we can
see the price trading in a range between the resistance in the 1.3450 area and the support in the 1.3350 zone. After the
blockbuster NFP report the price rallied towards
the resistance and then fell again towards support.
The CPI report today will decide
the next move: a beat to the expectations should drive the price back up
towards resistance and possibly higher, on the other hand a miss should give a
break lower and a fall towards the triangle base at 1.3225.
On the 1 hour chart below, the
price is currently trading right at the support and we can also see a divergence with the MACD. This signals a weakening
selling momentum and generally a pullback or reversal to follow.
From a risk management
perspective though, it would be better to wait for the CPI report before taking
trading positions because such strong fundamental catalysts can invalidate
easily any good technical setup. Being prepared for the possible outcomes is
key and the levels are defined.