USD/CAD Remains Supported On Dips28 November, 2019 by Aayush Jindal in Market Analysis
- USD/CAD struggled to continue above 1.3325 and corrected lower.
- A connecting bullish trend line is forming with support near 1.3245 on the 4-hours chart.
- The US GDP grew 2.1% in Q3 2019 (Prelim), better than the 1.9% forecast.
- The Euro Zone Consumer Confidence is likely to remain at -7.2 in Nov 2019.
USD/CAD Technical Analysis
This past week, the US Dollar climbed higher nicely above the 1.3250 and 1.3280 resistance levels against the Canadian Dollar. However, USD/CAD struggled to continue above 1.3325 and corrected lower.
Looking at the 4-hours chart, the pair traded as high as 1.3327 and recently declined below the 1.3300 level. The pair even broke the 1.3280 support area.
It tested the 50% Fib retracement level of the upward move from the 1.3190 low to 1.3327 high. On the downside, there are many supports near 1.3240 and the 100 simple moving average (red, 4-hours).
Besides, there is a connecting bullish trend line forming with support near 1.3245 on the same chart. The 61.8% Fib retracement level of the upward move from the 1.3190 low to 1.3327 high is also near 1.3242.
Therefore, a break below 1.3240 could start an extended downside correction. The next major support is near the 1.3190 level and the 200 simple moving average (green, 4-hours).
Conversely, USD/CAD could continue to rise above 1.3280 and 1.3300. A successful close above 1.3300 might enable the pair to even surpass the 1.3327 high in the near term.
Fundamentally, the US Gross Domestic Product report for Q3 2019 (Prelim) was released by the US Bureau of Economic Analysis. The market was looking for the GDP to grow 1.9%.
However, the actual result was better than the forecast, as the US Gross Domestic Product increased 2.1% in Q3 2019, according to the “second” estimate.
The report stated:
Real gross domestic income (GDI) increased 2.4 percent in the third quarter, compared with an increase of 0.9 percent (revised) in the second quarter.
Upcoming Economic Releases
- Euro Zone Consumer Confidence Nov 2019 – Forecast -7.2, versus -7.2 previous.
- German CPI for Nov 2019 (YoY) (Prelim) – Forecast +1.3%, versus +1.1% previous.
- German CPI for Nov 2019 (MoM) (Prelim) – Forecast -0.6%, versus +0.1% previous.