USDCAD Daily Outlook and Extended Technical Analysis
Based on Content by ActionForex
On June 7, 2024, the US Dollar and Canadian Dollar (USDCAD) currency pair displayed a mixed technical outlook. The pair remains within a consolidative phase, and movements are contained within recently established ranges. Though the immediate directional bias may suggest potential upward movement, traders are observing the major levels as critical decision points for medium-term market behavior.
Analyzed below are the daily technical developments, broader chart patterns, key support and resistance levels, along with macroeconomic influences that could drive price action in the coming sessions.
Short-Term Technical Picture
– The pair rebounded from support levels at 1.3605, closing slightly stronger.
– Momentum shows some persistence, but upward traction is still viewed as corrective against recent pullbacks.
– Indicators such as RSI (Relative Strength Index) remain within a neutral mid-range, suggesting lack of directional conviction.
– Short-term resistance is seen at 1.3743, last week’s high. Should this be broken clearly, the next upside targets would be 1.3799 and then 1.3860.
While the pair demonstrates attempts to recover lost ground, traders are skeptical due to the lack of strong bullish momentum. The fundamentals backing any potential rally must be reasserted, especially as monetary policy differentials remain a central focus.
Support Levels to Watch
– Immediate support at 1.3605 remained firm and served as the platform for the most recent rebound.
– A break below that level could prompt a test of the next support at 1.3486, a level that proved pivotal in the past month.
– Deeper declines toward 1.3350 could indicate a reversal of the broader uptrend that has developed since April 2024.
These support zones are significant because they mark important reaction lows and areas of previous buying interest. A decisive breach could mark a shift in the technical and sentiment-driven outlook for the pair.
Medium-Term Trend
Examining the broader context on the daily and weekly charts:
– The original uptrend from the February 2024 low of 1.3176 appears to be intact, though momentum has paused.
– Over the past several weeks, the USDCAD has formed a notable ascending channel, giving an upward bias unless the structure breaks.
– Trend line support drawn from the April lows lies near 1.3530, providing a buffer against significant downside pressures.
As long as the support trend line and key moving averages (particularly the 100-day simple moving average) hold, bulls have reason to maintain optimism. However, any violation of 1.3486 may challenge that view.
Momentum and Volume Indicators
Several popular technical tools present a neutral to mildly bullish picture, depending on the settings and timeframes considered.
– RSI: Currently oscillating around 50 on the daily chart, indicating a lack of strong conviction from either buyers or sellers.
– MACD: Shows a slight bullish crossover, but short histogram bars imply the momentum is weak.
– Stochastic Oscillator: Moving toward overbought territory from a mid-range setup, which may limit immediate upside potential.
Volume has been modest in recent trading days, supporting the argument that current moves are corrective rather than directional breakouts. A surge in volume would likely be a precursor to any sustainable breakout move.
Fundamental Influences Impacting USDCAD
The performance of the USDCAD pair is closely linked to monetary policy expectations and economic indicators from both the United States and Canada. Several macro factors play into investor sentiment and positioning.
1. Fed’s Interest Rate Outlook:
– Markets remain uncertain as to whether the Federal Reserve will proceed with rate cuts in late 2024.
– U.S. economic data such as job numbers, inflation figures, and GDP growth are being scrutinized for forward guidance.
– Sticky inflation and robust employment have kept the U.S. Dollar supported.
2. Bank of
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