**USD/CAD Daily Technical Outlook – Expanded Analysis**
*Adapted and expanded upon the original article by Action Forex. Additional insights compiled from various financial analysis sources including DailyFX, Investing.com, and MarketWatch.*
The USD/CAD pair is undergoing notable technical movements that warrant close attention, particularly for traders focusing on North American currency dynamics. With the U.S. dollar consolidating strength against major counterparts and the Canadian dollar reacting to macroeconomic and oil price dynamics, the USD/CAD currency pair presents pivotal opportunities for both short-term and longer-term trading strategies. Below is a comprehensive and detailed technical outlook for USD/CAD, including updated information and multiple time frame perspectives.
## Current Market Overview
As of the latest trading sessions, USD/CAD continues to hover in a consolidation range after a notable corrective pullback. Following recent strength in the U.S. dollar due to resilient economic indicators and persistent inflation, the pair has found support levels from which it may resume its broader upward trajectory.
– USD/CAD is currently trading around the 1.37 handle, marking a significant rebound from recent lows near 1.36.
– The pair’s momentum is driven by a juxtaposition of U.S. economic resilience and Canadian dollar weakness, partly due to softening oil prices.
– DXY (U.S. Dollar Index) strength is providing a bullish backdrop for further advances in USD/CAD.
– Canadian economic fundamentals remain mixed with inflation still above the Bank of Canada’s target, yet growth showing signs of moderation.
## Daily Technical Outlook
The daily chart for USD/CAD presents several key features that should guide short- and medium-term decision-making:
– The pair has held above the 55-day EMA (Exponential Moving Average) near 1.3630, which reinforces a short-term bullish bias.
– A reversal on June 10 saw bullish candlestick formation off this support, confirming the integrity of the uptrend.
– The recent higher low pattern signals the possibility of a continuation upward toward the 1.3780 resistance followed by 1.3845.
### Key Technical Levels
Support Levels:
– 1.3630: A confluence area around the 55-day EMA and previously broken resistance turned support.
– 1.3600: Psychological round number and horizontal support.
– 1.3480: March low and major swing support.
Resistance Levels:
– 1.3785: Near-term resistance formed in May, where selling pressure previously emerged.
– 1.3845: Year-to-date high and critical resistance zone.
– 1.3900: Psychological level likely to draw interest from institutions.
The risk in the immediate outlook is skewed to the upside. However, a failure to break above 1.3785 could trigger another short-term retracement toward 1.3630 or deeper.
## Indicators and Momentum
Let’s examine the primary technical indicators to further understand the current sentiment and likely direction:
– Relative Strength Index (RSI): The RSI on the daily chart is at 58, suggesting moderate bullish momentum. There’s no immediate sign of overbought conditions, leaving room for further gains.
– Moving Averages:
– 21-day EMA has crossed above the 55-day EMA, a bullish crossover.
– Prices stay above both the 21-day and 55-day EMAs, indicating forward momentum.
– MACD (Moving Average Convergence Divergence): The MACD histogram has recently crossed into positive territory, again indicating upward momentum building.
## Fundamental Considerations
While technical analysis forms the foundation for short-term trades, fundamental factors will also impact the pair’s direction.
US Dollar Drivers:
– The Federal Reserve’s hawkish stance, reiterating the higher-for-longer interest rate narrative, has been providing tailwinds to the USD.
– U.S. employment data, inflation figures, and robust GDP growth continue to support the narrative of a resilient U.S. economy.
– Fed Chair Jerome Powell’s recent
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