**USD/CAD Daily Outlook and Technical Analysis**
*Adapted and expanded from ActionForex.com’s original analysis by ActionForex Analysts. Additional insights and technical commentary have been included from various forex analysis sources such as DailyFX, FXStreet, and FOREX.com.*
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### Overview
The USD/CAD currency pair has displayed mixed movement in recent trading sessions, reflecting uncertainty in both U.S. and Canadian economic outlooks. As of the latest market activity, the USD/CAD has fluctuated close to a key short-term support level, with the market awaiting stronger signals concerning interest rates, economic growth, and oil prices.
At the heart of this movement are conflicting signals from both the Federal Reserve (Fed) and the Bank of Canada (BoC). While U.S. economic data remains generally robust, Canada’s figures are mixed, particularly with signs of softening inflation. In addition, fluctuations in crude oil prices, which heavily influence the Canadian dollar, are playing a key role in trading dynamics.
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### Current Technical Picture
According to the original analysis on ActionForex.com, USD/CAD remains under pressure but within expected ranges. Let’s break down the key technical aspects:
– **Immediate Support Level**: 1.3620 – A near-term level where the pair seems to have found support.
– **Immediate Resistance Level**: 1.3795 – A short-term ceiling based on recent price action.
– **Trend Structure**: The pair remains range-bound, trapped between short-term support and resistance, and is not showing decisive momentum in either direction.
– **Momentum Indicators**:
– **RSI (Relative Strength Index)**: Near neutral levels, indicating the lack of momentum or oversold/overbought conditions.
– **MACD (Moving Average Convergence Divergence)**: Shows flat momentum, reflecting consolidation.
If USD/CAD breaks clearly below the 1.3620 level, this would open up the possibility of a move to retest the 1.3486 low, a pivot point from late April that has marked the lower end of its trading range in recent weeks.
On the upside, a break above the resistance at 1.3795 would confirm short-term bullish momentum and could pave the way for a retest of the 1.3843 high from May, and possibly move toward the psychological 1.3900 mark.
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### Bigger Picture
From a longer-term perspective, ActionForex analysts point out that the broader outlook remains neutral to slightly bullish unless the 1.3486 support area is convincingly broken. The overall USD/CAD trend has been one of consolidation within a medium- to long-term uptrend that began in mid-2023.
Key support zone: Between 1.3400 and 1.3486
Key resistance zone: Between 1.3800 and 1.3900
If 1.3486 is breached with momentum, this could confirm a short- to medium-term trend reversal as the pair would break the ascending trend line support that has been in place for over a year.
On the other hand, if the pair maintains ground above the 1.3650 handle or climbs above 1.3800, this would reconfirm bullish strength and potentially resume the longer-term ascent.
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### Fundamental Drivers Impacting USD/CAD
To understand USD/CAD price fluctuations, traders need to closely monitor key fundamental data from both the U.S. and Canadian economies:
**U.S. Factors:**
– **Federal Reserve Policy**:
– Recent communications from the Fed suggest a delay in rate cuts due to persistent inflationary pressures.
– A more hawkish Fed bodes well for USD strength and puts upward pressure on USD/CAD.
– **Inflation and Jobs Data**:
– The May CPI report showed slowing but still sticky inflation.
– Strong job market data, including Non-Farm Payroll reports, has supported the USD.
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Read more on USD/CAD trading.