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Aayush Jindal

Key Highlights

  • USD/CAD started a fresh increase above the 1.2800 resistance.
  • It broke a major bearish trend line at 1.2650 on the 4-hours chart.
  • EUR/USD is struggling below 1.0500, and GBP/USD is consolidating near 1.2100.
  • The BoE interest rate decision is scheduled today (forecast 1.25%, versus 1.0% previous).

USD/CAD Technical Analysis

The US Dollar formed a base above the 1.2550 level against the Canadian Dollar. USD/CAD broke many hurdles near 1.2650 to start a fresh increase.

Looking at the 4-hours chart, the pair gained pace for a move above the 1.2700 resistance zone. There was also a move above a major bearish trend line at 1.2650.

The bulls pushed the pair above the 61.8% Fib retracement level of the key decline from the 1.3076 swing high to 1.2517 low. The pair settled above the 1.2800 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

On the upside, an immediate resistance is near the 1.2960 level. The next major barrier could be near the 1.3000 level. A clear move above the 1.3000 level might push the pair towards the 1.3080 level in the near term.

If not, the pair could correct lower and test the 1.2880 support. The first key support is near the 1.2780 level and the 200 simple moving average (green, 4-hours).

The next major support is near the 1.2720 level. Any more losses might send the pair towards the 1.2650 support.

Looking at EUR/USD, the pair failed to recover above the 1.0500 resistance zone and remains at a risk of more losses.

Economic Releases

  • BoE Interest Rate Decision - Forecast 1.25%, versus 1.0% previous.
  • US Housing Starts for May 2022 (MoM) – Forecast 1.701M, versus 1.724M previous.
  • US Building Permits for May 2022 (MoM) – Forecast 1.785M, versus 1.823M previous.