Missed this pair’s double bottom neckline break?
Price is still going for a retest of this area of interest which could hold as support.
Take a look at these Fibonacci retracement levels on the 4-hour chart!
USD/CAD 4-hour Forex Chart by TradingView
Rising crude oil prices and a less dovish BOC statement have allowed this pair to retreat from its run higher after confirming a long-term reversal pattern.
At the same time, a weak U.S. NFP print convinced dollar bears to return on stronger expectations of Fed rate cuts in their next policy huddle.
But will USD/CAD still find support at this area of interest?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S. dollar and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The upcoming U.S. July CPI Report could determine whether a bounce is due or not, as a strong inflation print could move the needle back in favor of the Fed keeping interest rates higher for longer.
In this case, look out for a continuation of the USD/CAD rally back to R1 (1.3800) then R2 (1.3850) near the swing high, especially since the 100 SMA is above the 200 SMA and appears to be holding as dynamic support for now.
On the other hand, a break below the area of interest could send the pair tumbling back down to the bearish targets at S2 (1.3670) then S3 (1.3630) or lower.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
