Title: USD/CAD Weekly Technical Outlook – Consolidation Continues as Market Watches Key Support and Resistance Levels
Original Source: ActionForex.com – “USD/CAD Weekly Outlook” by ActionForex Analysts
Supplemented with information from DailyFX, Investing.com, and other technical analysis sources
Overview:
The USD/CAD pair continues to display a consolidative pattern in the near term, reflecting a balance of economic data, market sentiment, and central bank positioning. In the week ending June 7, the pair moved slightly lower, closing the week around 1.3667. The pair remains trapped within a short-term range, and technical indicators suggest that a more decisive breakout could be imminent. This article delves into the current technical outlook based on price action, trendlines, moving averages, Fibonacci retracement levels, and macroeconomic considerations influencing the US dollar and Canadian dollar.
Technical Summary:
– Pair: USD/CAD
– Recent Close: 1.3667
– Trend: Range-bound, sideways consolidation
– Key Resistance Levels: 1.3784, 1.3845, 1.3898
– Key Support Levels: 1.3565, 1.3486, 1.3400
– Momentum Indicators: Neutral to slightly negative
– Weekly Bias: Neutral to slightly bearish
– Long-Term Outlook: Potential for upside breakout if broader USD strength resumes
Weekly Price Action:
Last week’s price action showed limited directional momentum, as USD/CAD traded within a narrow range amid mixed data from both countries. After a slight uptick on stronger-than-expected U.S. ISM services data, the pair was pressured later in the week by lower-than-anticipated U.S. job openings, reflecting softening labor market conditions. On Friday, the Canadian employment report came in weaker than forecast, which slightly offset negative USD sentiment and helped the pair recover intraday losses.
However, neither side of the pair showed strong enough conviction to set a new trend, keeping the consolidation intact.
Key Technical Levels and Chart Patterns:
1. Resistance Near 1.3784:
– Acts as the immediate resistance level.
– This region aligns with the upper boundary of a short-term channel seen on the daily chart.
– A breach above this level could open the door toward 1.3845, representing the April high.
2. Major Resistance at 1.3845–1.3898:
– This higher resistance corridor holds the 61.8% Fibonacci extension from the March low to the April top.
– Also marks a key reversal point seen multiple times in 2023 and early 2024.
– A breakout above this zone would confirm bullish continuation and expose the psychological resistance at 1.4000.
3. Immediate Support at 1.3565:
– This key level coincides with the 38.2% Fibonacci retracement measured from the March low to April high.
– A daily close below this level would affirm bearish pressure.
4. Deeper Support around 1.3486–1.3400:
– The 1.3486 zone offers historical support and marks the 61.8% retracement level.
– Further selling could target the psychological level at 1.3400, aligning with the March lows.
– Below 1.3400, the medium-term bullish outlook becomes questionable.
5. Trendline Support:
– A long-term uptrend line from the January lows remains intact.
– This trendline intersects near the 1.3480–1.3500 region, reinforcing the importance of this support zone.
Momentum and Oscillators:
– RSI (Relative Strength Index) on the Daily Timeframe:
– Currently hovers around 50, indicating neutral momentum.
– No divergence observed, but a move below 40 may suggest a bearish shift.
– MACD (Moving Average Convergence Divergence
Read more on USD/CAD trading.