USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.3066; (P) 1.3094; (R1) 1.3112; More…

USD/CAD’s sharp fall and break of 1.3027 minor support suggests that rise from 1.2781 has completed at 1.3132 already, after rejection by near term channel resistance. This is also supported by bearish divergence condition in 4 hour MACD. Intraday bias is turned back to the downside for 1.2916 support first. Also, current development suggests that choppy corrective decline fro 1.3385 is not completed yet. Break of 1.2916 will likely send USD/CAD through 1.2781 low. On the upside, break of 1.3132 resistance is now needed to confirm rise resumption. Otherwise, risk will remain on the downside even in case of recovery.

In the bigger picture, rejection from the channel resistance from 1.3385 suggests that such corrective fall is not completed yet. And, a new low below 1.2781 would likely be seen. Nevertheless, we’d expect strong support inside 1.2527/1.2723 zone to contain downside to resume the up trend from 1.2061. The support zone represents 50% and 61.8% retracement of 1.2061 to 1.3385. On the upside, break of 1.3132 resistance will target a test on 1.3385 high.