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USD/CAD Starts Fresh Rally, FOMC Minutes Next

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Aayush Jindal

Key Highlights

  • USD/CAD started a fresh rally from the 1.2300 support zone.
  • It broke many hurdles near 1.2400 and 1.2420 on the 4-hours chart.
  • EUR/USD struggled to recover above 1.1900, GBP/USD failed to clear 1.3900.
  • The US ISM Services PMI declined from 64.0 to 60.1 in June 2021.

USD/CAD Technical Analysis

The US Dollar formed a strong base above the 1.2300 level against the Canadian Dollar. As a result, USD/CAD started a strong rally and it cleared many hurdles near 1.2400.

Looking at the 4-hours chart, the pair formed a double bottom pattern near the 1.2300 zone. It cleared a key bearish trend line with resistance near 1.2330 to move into a positive zone.

There was a strong upward move above the 1.2400 level. The pair even cleared the 1.2440 resistance and the last swing high at 1.2449. It tested the 1.236 Fib extension level of the last key decline from the 1.2449 high to 1.2302 low.

If there are more gains, the pair could test the 1.2500 resistance. The next major resistance is near the 1.2540 level. Conversely, the pair could correct lower towards 1.2400.

The next major support is near 1.2375 and the 100 simple moving average (red, 4-hours). Any more losses may possibly call for a drop towards the 1.2340 level.

Looking at EUR/USD, the pair failed to correct above 1.1900 and it remains at a risk of more losses. Similarly, GBP/USD failed to surpass the 1.3900 resistance zone.

Economic Releases

  • Canada’s Ivey PMI for June 2021 - Forecast 58.8, versus 59.8 previous.
  • FOMC Meeting Minutes.
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