USDCAD – US Dollar Downtrend Likely Over Vs CAD20 May, 2016 by Aayush Jindal in Market Analysis, Technical Analysis, USDCAD
USDCAD – US Dollar Downtrend Likely Over Vs CAD
- US Dollar after tumbling against the Canadian Dollar managed to find support near 1.2500.
- There was a bearish trend line formed on the daily chart of the USDCAD pair, which was broken by the bulls for an upside move.
- Today, the Canadian Consumer Price Index (CPI) will be released by the Statistics Canada, which is forecasted to post a rise of 1.7% in April 2016.
- Canadian Retail Sales report will also be released, which is forecasted to decline by 0.7% in April 2016, compared with the previous month.
USDCAD Technical Analysis
There was a continuous gain in the Canadian dollar vs the US dollar during the past few weeks. However, it looks like the USDCAD pair found a major support near 1.2500, as it started to move higher.
There was a monster bearish trend line formed on the daily chart of the USDCAD pair, which was cleared by the USD buyers for an upside move.
The pair may continue to trade higher in the near term. However, there is a crucial resistance area on the upside near the 100 and 200-day simple moving average, which may act as a barrier for the USD buyers.
Canadian CPI and Retail Sales
Today in Canada, the Consumer Price Index (CPI), which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services will be released by the Statistics Canada. The forecast is slated for a rise of 1.7% in April 2016, compared with the same month a year ago.
Moreover, the Canadian Retail Sales data will also be released around the same time. The market is expecting the Retail Sales to decline by 0.7% in April 2016, compared with the previous month.
If the reports fail to meet the forecast, then there is a chance of more losses in Canadian Dollar moving ahead.
US Initial Jobless Claims
Recently, the US Initial Jobless Claims report was released by the US Department of Labor. According to the report published, the number of people filing first-time claims for state unemployment insurance declined from 294K to 278K.
The US Dollar was seen gaining bids vs its peers during the past couple of sessions, and it may continue to trade higher.