Daily Forex Update: USD/CAD

Intraday, the USD/CAD pair is testing the support of a Triangle pattern at 1.0620 (S), with prices consolidating within the wide range from 1.0700 to 1.0608. The floor at 1.0608 sits just above additional Forecast area support between 1.0581 and 1.0527 (F), and should the USD/CAD trade lower through 1.0600, keep an eye on 1.0580 as a key price level to keeping the overall intraday uptrend intact.

Even though the pattern’s bottom line has been broken on the 30-minute chart, it did so with very little selling momentum (Autochartist’s Breakout reading is just one bar). This suggests that the near-term floor, at 1.0608, must be broken in order for prices to test support at 1.0593 – which is where prices bounced intraday on May 20.

Because of the low Initial Trend reading of three bars, the 30-minute USD/CAD remains in a sideways-moving accumulation cycle. It will likely trade in a narrow range until prices either follow-through lower towards the Forecast area, or are able to push higher through downtrend line resistance at 1.0690. However, a rally through 1.0690 will only put the USD/CAD at the doorstep of the prior resistance found at 1.0700, where selling pressure is likely to be waiting once again. While the overall trend on the USD/CAD is up, the climb higher from 1.0700 looks to be on a slippery slope.


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