USD/CAD Could Recover If It Breaks 1.2650, BoC Next
- USD/CAD formed a support base above 1.2500 and climbed higher.
- It broke a major bearish trend line with resistance near 1.2570 on the 4-hours chart.
- EUR/USD is correcting gains from 1.1900.
- GBP/USD also corrected lower after it failed to surpass 1.3900.
USD/CAD Technical Analysis
The US Dollar extended its decline below 1.2600 against the Canadian Dollar. However, USD/CAD formed a base near 1.2500 and recently started an upside correction.
Looking at the 4-hours chart, the pair traded as low as 1.2493 before it started an upside correction. There was a break above the 1.2550 and 1.2580 resistance levels.
The pair even cleared a major bearish trend line with resistance near 1.2570. There was a break above the 50% Fib retracement level of the downward move from the 1.2708 swing high to 1.2493 swing low.
The pair was able to settle above 1.2600 and the 200 simple moving average (green, 4-hours). It is now facing resistance near 1.2655, which is close to the 76.4% Fib retracement level of the downward move from the 1.2708 swing high to 1.2493 swing low.
A close above 1.2650 and 1.2655 could open the doors for a steady increase. If not, the pair might start another decline below 1.2600. The next major support is near 1.2550, below which the bears might aim more losses.
Looking at EUR/USD, the pair failed to hold gains and extended its decline below the 1.1865. Similarly, GBP/USD traded below the key 1.3800 support zone.
- BoC Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.
- Fed’s Beige Book.