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Canadian Dollar Price - USD/CAD May Resume Bearish Price Action

Canadian Dollar Price - USD/CAD May Resume Bearish Price Action

Mahmoud Alkudsi, Analyst
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USD/CAD Price Outlook, Charts and Analysis

  • US Dollar looking ahead to Fed Chairman Powell speech today.
  • USD/CAD edging lower after the last week’s failure to close above the consolidation zone.

Did we get it right with our US Dollar forecast? Find out more for free from our Q2 USD and main currencies forecasts

To learn more about data releases for this week check out DailyFX Economic Calendar

USD/CAD – Back to the Congestion Area

On May 29, USD/CAD rallied off the consolidation zone . However, it failed to close above 1.3517 and repeated its failure twice in the following days after returning to trade within the same old consolidation zone. The price showed a lack of momentum to keep rallying and this has been confirmed as the (RSI) reading remained flat between 58- 59.

Yesterday, the bears took the initiative leading USD/CAD to close below 1.3457. Alongside, the (RSI) crossed below the 50 threshold, tipping the scale to the downside.

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USD/CAD DAILY PRICE CHART (FEB 11, 2019 – Jun 04, 2019)

USD/CAD Price daily Chart 04-06-19

Looking at the USD/CAD daily chart we notice the bears looking to send the price to the lower end of April 23 consolidation zone at 1.3377. Weekly support levels at 1.3410, 1.3400 and 1.3386 should be watched closely.

Further bearish sentiment could start if the pair closes below 1.3377 moving the price to the March 4 – April 23 consolidation zone (1.3286 – 1.3377) with an increased likelihood to see the lower end of the range. Weekly support at the May 22 low 1.3357/54 and the support zone at 1.3341- 1.3335 should be monitored. Additionally, key support levels at 1.3309 and 38.2% Fibonacci retracement at 1.3299 also need to be considered.

A close above 1.3457 could mean a rally towards 1.3517. Daily resistances at 1.3469, 1.3493, remain in focus.

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USD/CAD price 2H chart 04-06-19

Looking at the 2-hour chart, today USD/CAD broke below the May 27 low at 1.3429 then rose to 1.3449. The price is testing the aforementioned low eying 1.3410. If the pair breaks below 1.3410 it may edge even lower towards 1.3377. The support at 1.3393 need to be monitored besides the daily and weekly support levels mentioned above.

A break above the down-trend line originated from the May 31 high at 1.3565 could lead the price towards 1.3493. Resistance at 1.3485 and the daily resistance mentioned above at 1.3469 are worth monitoring.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.