**USD/CAD Daily Outlook and Market Analysis**
Adapted and expanded from ActionForex.com article “USD/CAD Daily Outlook”, original credit to ActionForex
The USD/CAD currency pair remains a focal point for traders navigating the complexities of the North American economic landscape. As of the current market context, the pair has shown signs of recovery from recent lows, but broader technical trends and economic indicators suggest considerable resistance to substantial bullish momentum. This article provides a comprehensive analysis of USD/CAD based on the original insights from ActionForex.com, enhanced by deeper technical and fundamental perspectives obtained from other Forex resources.
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**Current Price Action and Technical Setup**
As per the original analysis from ActionForex:
– USD/CAD continues to show signs of mild recovery after a recent dip to 1.3602.
– However, intraday bias is currently neutral after markets failed to maintain gains past a short-term resistance.
– The bears could regain control if the pair moves convincingly below 1.3602, indicating resumption of the fall from the 1.3845 high.
Expanding on this:
– The currency pair has struggled to break above the short-term resistance around the 1.3700-1.3720 area.
– The 55-day Exponential Moving Average is currently converging towards the 20-day EMA, signaling a loss of upward momentum.
– The presence of lower highs from the April peak of 1.3845 confirms persistent downward pressure.
– RSI is hovering just above 40, suggesting bearish bias still exists despite interim bullish corrections.
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**Potential Downside Acceleration**
If USD/CAD decisively breaks below 1.3602, a key support level, we could see a more sustained descent toward key Fibonacci and structural levels.
– Next support lies near 1.3486, which is the 61.8% Fibonacci retracement of the 1.3176 to 1.3845 rally.
– Below that, the March low at 1.3357 would come into focus.
– A break below 1.3357 could open the door for a broader corrective move, potentially targeting 1.3220.
This aligns with broader technical structure, which suggests a potential medium-term topping pattern taking shape if successive lower highs continue to appear.
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**Outlook if Recovery Builds Momentum**
Conversely, on the upside:
– A break above the minor resistance at 1.3735 would bring the 1.3845 resistance level back under pressure.
– Sustained moves above this key resistance would reinstate the broader bullish trend originating from 1.3176 (February low).
– The next upside targets could be in the 1.3900–1.3925 zone, where long-term trendline resistance aligns with round number psychological barriers.
However, there are key challenges for bulls:
– The pair must overcome multiple moving average resistances and a declining trendline from 1.3845.
– RSI and MACD indicators show lack of momentum on bullish retracements, reflecting market indecision.
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**Broader Technical Trend and Price Channels**
Looking at the broader daily chart structure:
– USD/CAD has been in a broad sideways channel for several months, roughly between 1.3176 to 1.3845.
– Key structural supports and resistances within this channel include:
– Resistance: 1.3845 (April high), 1.3980 (October 2023 top)
– Support: 1.3486, 1.3357, 1.3176
– The upward sloping trendline connecting March 2023 and February 2024 lows remains intact but is weakening.
Should the pair decisively break below this trendline, it may signal a medium-term trend reversal.
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**Fundamental Overview: US Dollar vs Canadian Dollar**
Several fundamental factors are influencing the USD/CAD exchange rate:
1. **US Economic Data and Fed
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