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It's been a long time since the pair of North American dollars came into our field of vision. Today, we will fill this gap, and the main focus will be on technical analysis. However, let us briefly talk about the troubles that happened this week for the US dollar. After the June Fed meeting, some investors expected that in July, the Fed would outline the timing of reducing the quantitative easing program and maybe even hint when it would be possible to move to raise interest rates. To the disappointment of the bulls in the US currency, this did not happen. Only a full economic recovery and positive macroeconomic statistics will give the Federal Reserve a reason to switch to a more stringent monetary policy. Judging by yesterday's negative data on US GDP for the second quarter, we will have to wait for a rate hike, or at least a reduction in QE, for a long time. And now, let's move on to the price charts of the USD/CAD currency pair and see with what achievements the pair is approaching at the end of weekly trading.
Weekly
Of course, the correct thing is to consider the weekly charts of a particular trading instrument on Mondays after the Friday closing of trading. But since this currency pair is considered infrequently, let's look at the "week" today. First of all, let's pay attention to the previous bearish candle with a long upper shadow, which can be considered a reversal. A kind of "Inverted hammer," after which there is a decline in the exchange rate. The candle analysis did not disappoint, and we see such a decline thanks to the efforts of the Fed. If we look at the technical picture on a larger scale, it is evident that the pair is trading downward, and the current weekly trading range can be defined as 1.2000-1.2800. It is characteristic that after reaching the most important technical and psychological level of 1.2000, the pair began to adjust. It rose even above the first pullback level of 23.6 Fibo on the grid of the Fibonacci instrument, stretched for a decrease of 1.4667-1..2006. I believe that the blue 50 simple moving average, among other things, made its contribution as a strong resistance and threw the quote down. Summing up the results of the review of the weekly chart, we can conclude that the pair has completed the correction and is ready to continue the main movement in the south direction.
Daily
On the daily chart, the conclusion made above is fully confirmed. The quote failed to pass up the strong technical level of 1.2800 and turned to decline. The main trading idea for the USD/CAD pair is selling after pullbacks or bounces up. I recommend taking a closer look at the price zone 1.2460-1.2500 and, if bearish candle signals appear there, try selling the pair at this or smaller time intervals. However, it is necessary to take into account one important nuance. If the weekly and monthly trades end above the most important psychological and technical mark of 1.2500, changes may need to be made to the trading recommendations regarding sales. And so, judging by these two timeframes considered, the USD/CAD pair is looking down.
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