USD/CAD Could Rally If It Clears 1.2150
- USD/CAD is showing positive signs above the main 1.2060 support zone.
- It broke a key bearish trend line with resistance near 1.2100 on the 4-hours chart.
- EUR/USD and GBP/USD are struggling to climb above 1.2200 and 1.4200 respectively.
- The US CPI could increase 4.7% in May 2021 (YoY), up from 4.2%.
USD/CAD Technical Analysis
The US Dollar declined this week below the 1.2100 level against the Canadian Dollar. However, USD/CAD remained well bid near the 1.2060 support and it recently started a fresh increase.
Looking at the 4-hours chart, the pair traded as low as 1.2057 before a fresh increase. The pair settled nicely above the 1.2100 resistance zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
There was also a break above a key bearish trend line with resistance near 1.2100 on the same chart. The pair is now consolidating gains above the 1.2100 zone.
On the upside, there is a strong resistance waiting near 1.2130 and 1.2150. A successful close above the 1.2150 level could open the doors for another increase. The next key resistance sits at 1.2200.
Conversely, the pair could correct lower towards the 1.2080 support. The next major support is near the 1.2060 level, below which the pair could accelerate lower towards the 1.2000 level.
Looking at EUR/USD, the pair is struggling to gain momentum above the 1.2200 level. Similarly, GBP/USD is facing an uphill task near 1.4200 and 1.4220.
- ECB Interest Rate Decision - Forecast 0%, versus 0% previous.
- US Initial Jobless Claims - Forecast 370K, versus 385K previous.
- US Consumer Price Index for May 2021 (MoM) – Forecast +0.4%, versus +0.8% previous.
- US Consumer Price Index for May 2021 (YoY) – Forecast +4.7%, versus +4.2% previous.
- US Consumer Price Index Ex Food & Energy for May 2021 (YoY) – Forecast +3.4%, versus +3.0% previous.