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USD/CAD Daily Forecast – Overhead Resistance Cluster Blocking Upside

Nikhil Khandelwal

After quoting the day’s opening near 1.3218 level, the pair kept the positive trend intact in the Asian session. At around 08:30 GMT, the USD/CAD pair was underway attempt to breakout above the 1.3243 resistance handle. Inability to make a move above this aforementioned benchmark might signal for pair’s weakness for further downward steps.

Meanwhile, the Crude prices nudged lower today on the backdrop of escalating US-Sino trade dispute, lowering the overall demand outlook. In the morning session, the oil prices were trading near $53.73 per barrel.

Significant Economic Events

The economic calendar stays lightly weighted amid lack of substantial economic events throughout the day. Meantime, the Crude bulls take a back seat on the absence of oil-catalyst events like EIA/API data releases.

Anyhow, the US Department of Treasury will publish the 3-month and 6-month Bill Yields at around 15:30 GMT. The 3-month Bill Yield had recorded near 1.99% while the 6-month Yield had marked at 1.95%.

Another point of interest for the day remains over the July Monthly Budget Statement which will come out at 18:00 GMT. This Budget Statement had reported $-8.0 billion last time. However, this time, the market expects this data to come near $-112.5 billion.

Technical Analysis

1-Month Chart

After maintaining a robust upward rally since 2011 until 2H’15, the Loonie pair was taking the shape of a symmetric triangle. Quite noticeably, the 50-day SMA had already made a superb jump over the 200-day SMA, making a Golden Cross.

USDCAD 1 Month 12 August 2019

Also, the pair currently stays near the apex of the symmetrical triangle and hence an immediate breakout at any point remains imminent. Though the histograms of the MACD technical indicator were pointing north side, the signal line remained above the zero line, entangled with the signal line.

1-Week Chart

On the weekly chart, the pair appeared to sustain slanting uptrend price actions since last few years. The bulls seem to step down as the pair has broken below a 2:1 Gann line.

USDCAD 1 Week 12 August 2019Anyhow, as per the monthly chart, the overall trend might come out positive. Hence, intermediate noises remain quite evident as a part of any upward price movement. Additionally, the below lying SMA confluence consisting of the 50-day, 100-day, and 200-day SMA, kept encouraging the bulls.

1-Day Chart

Now, focusing over the daily chart, the USD/CAD pair appears to attempt for a breakout out of the Red Ichimoku Clouds. An earlier disruption of a major counter trendline had already provided the necessary ammunition to the bulls.

USDCAD 1 Day 12 August 2019Anyhow, the overhead Ichimoku Clouds and north side-lying Parabolic SAR kept the downward push intact. Ability to breach above the 1.3247 mark would activate the resistances stalled near 1.3278, 1.3302, and 1.3375 levels.

This article was originally posted on FX Empire

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