USD/CAD entered a flying mode following the Fed’s hawkish shift on Wednesday. However, today, the pair hit resistance at 1.2486, and then, it pulled back. Overall, the price structure remains of higher highs and higher lows, well above the upside support line drawn from the low of June 1st and thus, we would consider the short-term picture to be positive.
The rate may retreat a bit more, perhaps to test the 1.2386 barrier, which is near the inside swing high of last Thursday. The bulls may regain control from there and push the action above 1.2486, thereby confirming a forthcoming higher high. Such a move may initially target the peak of April 22nd, at 1.2535, the break of which could carry larger bullish implications, perhaps opening the path towards the 1.2627 area, defined as a resistance by the highs of April 8th, 13th, and 20th.
Shifting attention to our short-term oscillators, we see that the RSI exited its above-70 zone, while the MACD, although at extremely positive levels, has topped as well and moved below its trigger line. Both indicators detect slowing upside speed and support the notion for some further retreat before the next positive leg.
Now, in order to start examining a larger correction to the downside, we would like to see a dip below 1.2340. This may initially pave the way towards the 1.2290 barrier, marked by the inside swing high of May 6th, where another break could see scope for extensions towards the inside swing high of June 15th, at 1.2203.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.05% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2021 JFD Group Ltd.