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USD/CAD Bulls Aims Fresh Surge – Here’s Why

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Aayush Jindal

Key Highlights

  • USD/CAD is moving higher from the 1.3320 support zone.
  • It broke a key contracting triangle with resistance near 1.3420 on the 4-hour chart.
  • EUR/USD is gaining bearish momentum below the 1.0820 support.
  • The BoE interest rate decision is scheduled today (forecast 5.25%, versus 5.25% previous).

USD/CAD Technical Analysis

The US Dollar is showing positive signs from the 1.3250 zone against the Canadian Dollar. USD/CAD is gaining pace above 1.3400 and might continue to rise.

Looking at the 4-hour chart, the pair broke a key contracting triangle with resistance near 1.3420. Earlier, the pair found support near the 50% Fib retracement level of the upward move from the 1.3178 swing low to the 1.3541 high.

The pair is now trading above the 100 simple moving average (red, 4 hours) and the 200 simple moving average (green, 4 hours). On the upside, the bulls are facing hurdles near the 1.3450 level.

The next key resistance is near the 1.3500 level. A close above the 1.3500 zone could open the doors for more upsides. The next stop for the bulls might be 1.3550. Any more gains might send EUR/USD toward the 1.3620 level.

If there is another decline, the pair might find bids near the 1.3420 level. The main support sits near the 1.3360 level. If there is a downside break below the 1.3360 level, the pair could even dive below 1.3320. The next major support is 1.3250. Any more losses might call for a drop toward the 1.3200 support.

Looking at EUR/USD, the pair is gaining bearish momentum and there could be more losses below the 1.0800 support zone.

Economic Releases

  • BoE Interest Rate Decision - Forecast 5.25%, versus 5.25% previous.
  • US ISM Manufacturing Index for Jan 2023 – Forecast 47.0, versus 47.4 previous.
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