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USD/CAD Daily Forecast – Symmetric Triangle in Play for DXY above 97.30

Bharat Gohri

In the last North American session, the Loonie pair had soared from 1.3045 bottom mark, straight to 1.3129 level. Today, the USD/CAD pair continued to keep the tempo high, reaching 1.3138 level.

Last day’s positive upliftment had come, following a rise in the USD Index. Notably, the Greenback had taken the flight over revised 2-year Debt/Spending Ceiling deal, and Trump’s criticism over the Fed. The White House and the Congress reached an agreement to increase the aforementioned ratio’s limit from $1.32 trillion to $1.37 trillion in FY’20. Following this, the US Dollar Index shot up 0.20% reaching 97.47 level today. Such a strong move on the USD front also bestowed USD/CAD, pushing the pair upwards.

On the technical chart, the US Dollar Index seemed to have broken the 1-month old symmetrical triangle and was moving upwards. Therefore, the market can expect more immediate breakouts in the Greenback in the upcoming sessions.

US Dollar Index 240 Min 23 July 2019

Meantime, the Crude prices kept rising amid uprising Middle East tensions, creating demand concerns. Anyhow, the overall current market conditions vowed for weaker oil demand, keeping the gains limited.

Significant Economic Events

Traders anticipate the US Housing and Home loans data today. The Housing market data acts as a sensitive factor to the US economy and hence needs close attention. The Street analysts expect the May MoM Housing Price Index to report 0.1% lower than the previous 0.4%. Anyhow, the market stays in-line over the Existing MoM June Home Sales data, expecting 5.34 million, this time.

The Canadian economic docket remains quite silent amid lack of events. However, on the Crude front, the API Weekly Crude Oil Stock computed since July 19 will come out at around 20:30 GMT. The Inventories report had recorded -1.401 million, previous time.

Technical Analysis

1-Day Chart

USDCAD 1 Day 23 July 2019

The 50-day short-term SMA was heading south, crossing the 100-day and 200-day SMA, one after the other in the last few sessions. The pair had also managed to fill up the upper wick of the candle formed two days back. Hence, positive drifts in the near term seem quite imminent. Anyhow, on moving further upwards, the bulls might find difficulty on reaching near the 200-day SMA stalled at 1.3300 psychological mark.

4-Hour Chart

USDCAD 240 Min 23 July 2019

The Loonie pair finally made a triumphant march, breaching the 1.3099 healthy resistance mark. Somehow, the sturdy 1.3146 resistance confined the upside, putting a lid over the pair’s daily gains. If the USD/CAD pair makes an additional growth to the north side, then it would confront the significant 200-day SMA at 1.3170 level. Anyhow, the RSI was indicating near 64.74 mark, revealing over-bought conditions.

The article was written by Bharat Gohri, Chief Market Analyst at forex broker easyMarkets

 

This article was originally posted on FX Empire

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