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USD/CAD Could Revisit 1.2000, Faces Key Resistance

Key Highlights

  • USD/CAD is facing a strong resistance near 1.2090 and 1.2100.
  • A major bearish trend line is forming with resistance near 1.2080 on the 4-hours chart.
  • EUR/USD is stable above 1.2150, GBP/USD is aiming a clear break above 1.4200.
  • The US ADP Employment could change 650K in May 2021, down from the last 742K.


USD/CAD Technical Analysis

After forming a base above 1.2000, the US Dollar started a fresh increase against the Canadian Dollar. USD/CAD broke the 1.2050 resistance, but it struggled to clear the 1.2100 resistance zone.

Looking at the 4-hours chart, the pair traded as high as 1.2092 and recently corrected lower. It traded below the 1.2075 support level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair even traded below the 50% Fib retracement level of the upward move from the 1.2006 low to 1.2092 high. The next major support is near the 1.2030 level.

The 76.4% Fib retracement level of the upward move from the 1.2006 low to 1.2092 high is near the 1.2028 level. Any more losses could trigger a risk of a break below the 1.2000 level.

On the upside, the pair is facing resistance near the 1.2080 level. There is also a major bearish trend line forming with resistance near 1.2080 on the same chart. A successful break above the trend line resistance could increase the chances of a move above 1.2100. The next major resistance could be 1.2140.

Besides, EUR/USD is trading nicely above the 1.2150 support zone. GBP/USD corrected lower once again, but the bulls protected the 1.4100 support.

Economic Releases

  • Germany’s Services PMI for May 2021 - Forecast 52.8, versus 52.8 previous.
  • Euro Zone Services PMI for May 2021 – Forecast 55.1, versus 55.1 previous.
  • UK Services PMI for May 2021 – Forecast 61.8, versus 61.8 previous.
  • US Services PMI for May 2021 – Forecast 70.1, versus 70.1 previous.
  • US ISM Services Index for May 2021 – Forecast 63.0, versus 62.7 previous.
  • US ADP Employment Change May 2021 - Forecast 650K, versus 742K previous.