USD/CAD Daily Technical Analysis – 20th January

The Pair USDCAD fighting 50 day-SMA before Upcoming Downside Correction

USD/CAD Daily Technical Analysis

The short-term outlook suggests that the USD/CAD pair attempted to break the 50-day SMA (orange line). The rejection at this resistance level is keeping the battle between USD/CAD and 50-day SMA alive. The RSI indicator at the 49.00 mark is giving neutral signals. However, the Stochastic Oscillator with a blue line about to cross the red dotted line from above signals the potential bearish cross.

The recent low level at 1.33502 level is acting as immediate support. If this level is broken, the next support will be seen at the November lowest level at 1.32386. After this level, the 200-day SMA (aqua colour line) will act as the third support level for USD/CAD.

On the other hand, if the prices manage to hold and break the 50-day SMA level, the immediate resistance will be at 1.35272. In case of a break of this level, the pair might hover towards the 1.35840 level or higher to challenge the 1.37098 barriers.
The technical analysis shows that the 50-day SMA holds back the currency pair USD/CAD at 1.35000. Any break above this level might trigger an upside momentum. However, if this level keeps on fighting, a bearish correction might happen.

Fundamental Analysis

The Retail Sales and Core Retail Sales data for November from Canada is going to release in a few minutes. The data is expected to decrease by 0.6% and 0.5% for Retail & Core Retail Sales, respectively. Meanwhile, the US Dollar Index (DXY) was also moving higher with +0.27% at 102.33, giving further push to USD/CAD prices on the ending day of the week.

Furthermore, the crude oil futures were also high with +0.46% at 81.00 per barrel, buoyed by the improved outlook of China demand after the second largest economy and the largest consumer of Oil reopened its economy from the lockdowns. The combination of rising USD and Crude oil prices kept the USD/CAD pair movement under consolidation for the day. In the American trading session, the Existing Homes Sales data and speech from FOMC Member Waller will also drive the volatility in currency pair prices.

USD/CAD Daily Technical Levels

Support Resistance

1.3431 1.3506

1.3400 1.3552

1.3355 1.3582

Pivot Point: 1.3476