USDCAD Technical Analysis – Big Selloff 0 (0)

<p class=“MsoNormal“>On the daily USDCAD chart below, we can
see that after breaking the key <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> level at 1.3664, the pair just
sold off massively helped also by the rising oil prices. Yesterday, <a target=“_blank“ href=“https://www.tradingview.com/chart/CIPuZN0R/?symbol=NYMEX%3ACL1%21″>oil
even gapped up</a> in a big way following surprise cuts by OPEC+ on
Sunday. </p><p class=“MsoNormal“>The USD is also under pressure as
the market is trading on interest rates expectations at the moment with the Fed
expected to end its hiking cycle at the May meeting barring any awful economic
data. At this point, only very ugly economic data can help the US Dollar as the
market would switch from the rates trade to the recession trade and the USD
would be sought as a safe haven.</p><p class=“MsoNormal“>On the 4 hour chart below, we can
see that the downtrend is well sustained. The <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> act as resistance and the buyers will want to wait for them to cross to
the upside to give some confirmation of a change in trend. Yesterday we also
got very weak <a target=“_blank“ href=“https://www.forexlive.com/news/is-ism-march-manufacturing-index-463-vs-475-prelim-20230403/“>ISM
Manufacturing PMI</a> data, which may be an early sign that the economic
data are about to turn south again after a bounce in January and February. It
may also be a sign that the recent banking troubles may have indeed caused some
pain. </p><p class=“MsoNormal“>On the 1
hour chart below, we can see that after breaking the support the price started
to trade within a channel. If we get a pullback, the sellers may lean on the
upper bound of the channel and a <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level. The buyers, on the other hand, will want to
see a breakout to the upside before piling in and target the previous support
turned resistance at 1.3664. Tomorrow we have the <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>ISM Services PMI</a> and if even those tumble, then
we may start to see the market trading the recession.</p>

This article was written by ForexLive at www.forexlive.com.

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