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USD/CAD Could Extend Losses, US GDP Next

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Aayush Jindal

Key Highlights

  • USD/CAD started a fresh decline from well above 1.2750.
  • It traded below a key bullish trend line with support near 1.2560 on the 4-hours chart.
  • EUR/USD is attempting a decent recovery above the 1.1820 resistance.
  • GBP/USD climbed above 1.3900, gold price is showing bullish signs above $1,800.

USD/CAD Technical Analysis

The US Dollar topped near the 1.2800 zone against the Canadian Dollar. USD/CAD started a fresh decline and it broke a couple of key supports near 1.2700.

Looking at the 4-hours chart, the pair even broke the 1.2680 support zone. It settled below the 1.2620 pivot level and the 100 simple moving average (red, 4-hours). The bears were able to push the pair below the 50% Fib retracement level of the upward move from the 1.2453 swing low to 1.2807 high.

There was also a break below a key bullish trend line with support near 1.2560. The pair is now consolidating near the 1.2515 support.

The 76.4% Fib retracement level of the upward move from the 1.2453 swing low to 1.2807 high is also near the 1.2515 level. Any more downsides could set the pace for a larger decline in the coming sessions. The next major supports sits near 1.2450.

On the upside, the previous support at 1.2600 and 1.2620 could stop upsides. A close above 1.2620 might start a fresh increase towards 1.2700.

Looking at EUR/USD, the pair is attempting a fresh increase and it might clear 1.1850. Besides, GBP/USD is gaining pace above 1.3900.

Economic Releases

  • US Initial Jobless Claims - Forecast 380K, versus 419K previous.
  • US Gross Domestic Product Q2 2021 (Preliminary) – Forecast 8.6% versus previous 6.4%.
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