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USD/CAD Daily Forecast – Bulls Aiming the Base Line of Ichimoku Clouds

Nikhil Khandelwal

After marking the daily opening near 1.3215 level, the Loonie pair took a descending path, settling near 1.3189 level. The SMA conflux consisting of the 50-day, 100-day, and 200-day SMAs, kept moving overhead, forbidding any potential upside drifts.

Resilient Greenback

Notably, the US Dollar Index was underway recovery after suffering a sharp pullback triggered straight from 98.92 level. Yesterday, the RSI was indicating below 35 levels, revealing an oversold condition. During the Asian trading session, the Greenback was testing the 23.6% Fib Retracement level or 97.64 level.

US Dollar Index 240 Min 06 August 2019

If the Index moves furthermore upwards, then that would activate the resistances stalled at 97.59, 97.74, 98.19, and 98.33 levels. On the downside, 200-day SMA and a more-than-a-month old slanting ascending support line stand firm, preventing downfall risks.

In the meanwhile, the Crude Oil WTI Futures were trading near $55.25 per barrel in the morning session. The demand outlook for the commodity has dropped significantly over rising trade tensions.

Significant Economic Events

On Tuesday, the economic calendar contains hardly any vital data, possessing enough potential to tweak the pair’s daily price actions. After last week’s Unemployment data release, June JOLTS Job Opening remains the primary point of interest for traders. This time, the Street analysts expect the Job Opening data to drop 6K over the previous 7.323 million. Next up at 16:00 GMT, James Bullard, Fed President of St. Louis, will put forward his opinions over the economy. Also, Bullard would add in some points on the Fed rate cut expectations in September.

Amidst absence of CAD-specific significant events, Oil-catalyst API Weekly Crude data computed since August 2 might attempt to impact the price actions. This Crude data had reported -6.024 million, last time.

Technical Analysis

4-Hour Chart

Last month, the USD/CAD pair had broken a significant counter trendline, marching upside. Moreover, this month, the pair breached another major counter trendline, strengthening the bulls.

USDCAD 240 Min 06 August 2019

While moving upwards, the USD/CAD pair had taken intermediate halts at a 20-day old slanting ascending support line. Meanwhile, the 50-day SMA had crossed and moved above the 200-day SMA, making a “Golden Cross“. Also, the 200-day SMA was heading south side in order to act as a firm support region, alleviating daily losses.

1-Hour Chart

The buyer side seemed less interested as the RSI was pointing towards 46.19 levels. Quite noticeably, the Ichimoku Clouds were hovering above the USD/CAD pair, providing control to the bears.

USDCAD 60 Min 06 August 2019

Nevertheless, the pair was struggling to make a move above the overhead base line and conversion line. Anyhow, the Parabolic SAR was approaching the Loonie pair from the top and might soon shift below the pair, developing a bullish perspective.

This article was originally posted on FX Empire

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