On the daily chart below for USDCAD, we can
see that after breaking the strong support at 1.3664, the pair just melted
for hundreds of pips. We got a bounce recently as bad US data started to give
the market recession vibes and the US Dollar is the go-to currency in case a
recession unfolds.

The NFP report last Friday surprised again though showing
strong labour market data. We’ve got some choppy price action afterwards due to
Easter Holidays. Today is the US
CPI Day, and
the market is unlikely to move much ahead of it.

USDCAD technical analysis

On the 4 hour chart below, we can
see that the recent bounce stalled right at the previous swing level at 1.3553
where we also had the confluence with the 38.2% Fibonacci
retracement level. The moving
averages have crossed to the downside again after the price rejected the
resistance, so the sellers are in control for now.

The first natural target should
be the low at 1.3406 with more to come in case the sellers manage to break
below it. Today’s data is likely to decide the next big move. A miss to the
expectations should favour the sellers, while a beat should give the buyers
some control.

On the 1
hour chart below, we can see a nice setup for the sellers in case the price
pulls back to the 1.3480 level where we have the trendline, the swing level resistance and
the 50% Fibonacci retracement level.

All this
confluence in the same spot makes that zone a strong resistance and gives the
sellers a nice barrier where they can lean onto and have a defined risk just
above it. The buyers, on the other hand, will want to see the price to break
above this strong area to start piling in and target the resistance at 1.3553.

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