It pulled back from 1.3325 but I am not sure whether this is the end of the move north. Time will tell whether it will form any reversal candlesticks.
Risk is the topside trend line now.
The USDCAD moved higher on the back of the dovish BOC statement. In the process, the pair moved above a topside channel trend line at 1.3405. That is close risk for longs. Stay above keeps the bulls full in control.
Looking at the daily chart below, the pair hsa moved to the 61.8% of the move down from the end of December high at 1.3436. A swing high from early December comes in at 1.3443. The high just reached 1.3440 between those two levels. That area may continue to slow the run for now, with stops on a break higher.
So buyers are in control above the channel, but there seems to be some overhead resistance that may put a pause on the rally for now.
The break of the channel trend line keeps the bulls/buyers more in control. The only headwind would be profit takers against the 61.8% (and swing area).
PS looking at the 1 minute chart below, the run higher has the 50% of that move at 1.3406. That is near the trend line on the hourly chart and increases the levels importance for the bias tilt. Stay above is more bullish. Move below is more bearish....
Source: https://www.forexlive.com/technical-ana ... c-20190306
USD/CAD recorded strong gains for a second successive week, climbing close to 1 percent. There are only two events on the calendar in the week ahead. Here is an outlook for the highlights of this week and an updated technical analysis for USD/CAD.
The Bank of Canada maintained the benchmark rate at 1.75%, where rates have been pegged since October. The rate statement was dovish, which weighed on the Canadian dollar. In the rate statement, policymakers dropped a reference to rates rising over time. Instead, the bank said that the economy will continue to require stimulus and said that there was “increased uncertainty” about future rate hikes. The pessimistic language is a result of the economic slowdown, which has been worse than the bank anticipated. The BoC’s dovish tone has reinforced market expectations that the bank will not raise rates in the near future, and could lower rates if the economy continues to weaken.
Canada and the U.S .both ended the week with key employment numbers, with very different results. Canada added 55.9 thousand, crushing the estimate of 0.6 thousand. In the U.S., nonfarm payrolls plunged to 20 thousand, much worse than the forecast of 180 thousand. Wage growth improved to 0.4%, above the estimate of 0.3%. The Canadian dollar responded with slight gains to end the week.
USD/CAD daily chart with support and resistance lines
- NHPI Thursday, 00:30. The New Housing Price Index has been pegged at a flat 0.00% for five successive months.
- Manufacturing Sales Friday, 12:30. This key indicator should be treated as a market-mover. The manufacturing sector has been hurt by the global trading war, and manufacturing sales have declined in four of the past five releases. Another weak release could send the Canadian dollar lower.
USD/CAD Technical Analysis
USD/CAD continued to test resistance at 1.3445 (mentioned last week).
Technical lines from top to bottom:
With USD/CAD posting strong gains last week, we start at higher levels:
1.3757 has held in resistance since May 2017.
1.3660 was the high point for USD/CAD in December.
1.3547 capped USD/CAD in June 2017. Next, 1.3445 was the peak in early December.
1.3385 was the high point seen in May. 1.3350 was a stepping stone on the way and on the way down around the same time.
Lower, 1.3265 was the high point in mid-November. 1.3225 was tested in support in the middle of the week.
1.3175 was a swing low in late November.
1.3125 was a low point earlier that month.
1.3048 has provided support since early November.
I am bullish on USD/CAD
The slowdown in the Canadian economy is deeper than expected, as underscored by two straight declines in GDP. The BoC rate statement was understandably dovish, and investors will not be rushing to invest in an economy with questions marks. At the same time, further progress in the U.S-China trade war would raise risk appetite and likely boost the Canadian currency.
Source: https://www.forexcrunch.com/usd-cad-for ... ovish-boc/
The USD/CAD market has created back-to-back doji candle on the daily chart, signaling indecision near 1.33.
A close below 1.3289 (the low of the doji candle) would signal a resumption of the sell-off from the recent highs above 1.3460. Further, the probability of the spot finding acceptance under 1.3289 would rise if the diamond pattern seen in the 4-hour chart is breached to the downside.
On the other hand, the odds of the pair revisiting 1.34 would strengthen if the diamond pattern is breached to the higher side.
As of writing, the spot is trading at 1.330 with diamond resistance and support, currently at 1.3363 and 1.3313, respectively.
Source: https://www.fxstreet.com/news/usd-cad-t ... 1903190339
- US Dollar pullback dims Loonie weakness past EIA data.
- 12-week old descending resistance-line, at 1.3415, continues to act as the strong upside barrier.
The USD/CAD pair struggles around the day’s low of 1.3400 ahead of the European open on Thursday. The quote initially stretched its gains overnight on the EIA’s oil stocks report but failed to remain strong after the upbeat developments surrounding China pushed global traders away from the greenback.
The Energy Information Administration’s (EIA) oil stocks report for the week ended on March 22 followed the American Petroleum Institute (API) numbers by rising to 2.800 million barrels against the forecast of 0.309 million and -9.589 million prior.
With the Crude being Canada’s highest export earner, USD/CAD responded positively to the inventory report. It should also be noted that the US Dollar was already on a buying mode backed by the safe-haven demand.
However, the gains couldn’t last long and the quote again failed to successfully clear 12-week old resistance-line, at 1.3415 now, after positive news from China dimmed the greenback’s allure.
China’s Premier Li Keqiang sound positive about the world’s second-largest economy in his appearance at the Boao Forum while the US officials also lauded progress over the US-China trade talks.
Moving forward, the absence of Canadian data highlights the importance of the US economic calendar that carries some of the important statistics like the gross domestic product (GDP), initial jobless claims, personal consumption and pending home sales.
While final reading of the Q4 2018 GDP is likely to decline to 2.4% from 2.6%, initial jobless claims could rise to 225K from 221K during the week ended on March 22. Further, personal consumption and core personal consumption may remain unchanged at 1.5% and 1.7% during Q4 whereas pending home sales growth may soften in February to 0.7% from 4.6% marked in the earlier month.
USD/CAD Technical Analysis
Considering the USD/CAD pair’s another reversal from the 1.3415 resistance-line figure, the sellers can aim for 1.3370 and 100-day SMA level near 1.3310.
Meanwhile, a successful break of 1.3440 and 1.3470 could validate the quote’s strength in targeting 1.3510 if it ticks up the 1.3415 mark.
Sources: https://forex-station.com (Chart) & https://www.fxstreet.com/news/usd-cad-o ... 1903280511 (Article)
USD/CAD falls to the lows of the week
It's shaping up to be a pretty good week for the Canadian dollar. Oil has been choppy but it's up 2% today and is at the highest since November at $60.53.
The big driver was the Canadian GDP report as a jump in non-durable manufacturing contributed to a big beat at +0.3% versus 0.0% expected. USD/CAD immediately fell to 1.3353 from 1.3417. It's since continued down to 1.3348 on independent USD weakness after the PCE report.
Technically, it's not hugely significant but underpins a minor double top just above 1.3450. Now the minor uptrend since the start of the month is in focus.
Sources: https://forex-station.com (Charts) & https://www.forexlive.com/technical-ana ... p-20190329 (Article)
USD/CAD daily chart
- USD/CAD is trading in a bull trend above its 200 simple moving average (SMA) as the market is challenging the 1.3500 level.
- The Bank of Canada left its target for the overnight rate at 1.75%.
USD/CAD 4-hour chart
- USD/CAD bulls want a daily close above 1.3500 figure. The next resistances to the upside are seen at 1.3570 and 1.3650 level.
- Support is at 1.3460/40 and 1.3370 level.
Source: https://www.fxstreet.com/news/usd-cad-t ... streetnews