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Good day!
In this article, we will look at the technical picture for the USD/CAD pair, based on which we will try to determine the most current trading positions and entry points.
However, since there is a large flow of important macroeconomic data from the US and Canada this week, let's briefly discuss the most important ones. You can always find more information on the economic calendar.
So, today at 14:30 (London time), Canada will release the consumer price index. Let me remind you that this is one of the most important indicators that affect inflation.
Numerous speeches by members of the Open Market Committee of the US Federal Reserve will eventually end with the publication of the FOMC minutes at 20:00 (London time). You should also pay attention to the macroeconomic reports on American real estate. Now, let's move on to the price charts.
Weekly
Despite the fact that the US dollar strengthened last week across a wide range of markets, its geographical neighbor weakened against the "Canadian".
It is worth noting that the pair went within the limits of the Ichimoku indicator cloud, however, it was saved from further decline by the 50 simple moving average, which provided strong support.
At the time of writing, the downward trend continues this week and the pair is on the verge of going down from the Ichimoku cloud. If the week is successful and closes below the lower border of the cloud, we can expect a decline in the area of 1.3165. The strong technical mark of 1.3160 (+-5 points) itself is reinforced by the Kijun line of the Ichimoku indicator, as well as the 89 exponential moving average. The Tenkan line passes below 1.3139. Thus, it can be assumed that in a downward scenario, the main target will be the price area of 1.3165-1.3140. To be honest, it is worth looking at the pair's purchases from here. It is a strong and important price zone for opening positions.
Daily
On the daily chart, I stretched the Fibonacci grid to the growth of 1.2950-1.3328. The pair is trading for the sixth day in a row near the first pullback level from this movement of 23.6 Fibo. However, it seems that it will not be able to hold the price and will still be broken.
If this happens, we are waiting for the "Canadian" at the next corrective level of 38.2 Fibo, near the mark of 1.3185. However, the 200 exponential moving average, which runs at the iconic and significant level of 1.3200, may well support the quote and send the pair up.
Below the price area of 1.3185-1.3180 are 89 EMA, Kijun line and 38.2 Fibo level from the growth of 1.2950-1.3328.
So far, everything fits together. We are waiting for a correction to the area of 1.3185, where we are considering options for opening long positions on USD/CAD.
As for sales, I think it's a little late. Good resistance was provided by the Tenkan line, but if it is approached again, then most likely it will be broken.
H4
Most likely, the level of 23.6 Fibo breaks through. In this case, we are waiting for the pair in the area of 1.3200-1.3185, where 200 EMA and 38.2 Fibo. The second option for purchases at lower prices is recommended to look in the price zone of 1.3165-1.3140.
As for sales, they are riskier, however, those who wish can try them after rising to 50 MA. As you can see, this moving at the moment has a decent resistance. But this position is against the main upward trend, although everything will still be decided after the release of the Fed's minutes.
Good luck!
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