USD/CAD: technical picture
USD/CAD has reached the downside target at 1.0630. Nearby there is a support line from September 2012. The pair retraced 38.2% of the advance from 2012 to 2014.
Daily trend is bearish (ADX indicator shows that the downtrend is strong), although the pair’s currently oversold and 200-day MA hasn’t turned down. Support is at 1.0600, 1.0560 and 1.0440 (50% Fibo) and the odds are that the pair will test as least the first of these levels (the focus is on 1.0600, 61.8% of advance from 2013 to 2014). Resistance is at 1.0695, 1.0725 and 1.0795.
H4 chart shows MACD and RSI divergence indicating a possibility of correction up to 1.0720. Still, the outlook will remain bearish as long as the pair’s trading below 1.0845.
The main event risks are coming from the United States. ADP employment report is due at 12:15 GMT. Janet Yellen will speak today at 15:00 GMT.
Chart. Daily USD/CAD