The USDCAD has seen a rebound today after finding buyers near the swing area between 1.3589 and 1.3594 — a zone that held as support in earlier sessions. The bounce took the pair back up toward the 1.3628 level, which represents both today’s high and the high from yesterday, effectively reinforcing it as key resistance.
Despite the intraday push higher, buyers failed to break through that 1.3628 ceiling, leaving the pair trapped in a defined battle zone between 1.3589 and 1.3628. As long as price remains within that band, the pair remains in wait-and-see mode for the next directional shove.
A break above 1.3628 opens the door for further bullish momentum, with upside chart targets near:
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1.36388 – broken 61.8% retracement
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1.3651-54 – swing level from July 11 lows and also near the falling 100 hour moving average (blue line on the chart above)
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1.3684 – falling 200 hour moving average
Conversely, holding below 1.3628 and falling back below 1.3589 -94 swing area (see red numbered circles), would shift bias more negative, exposing:
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1.3574 – low from yesterday and for the week
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1.3555 – low for July
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1.3539 – low from June and for the year.
From a fundamental standpoint, Canada’s May retail sales fell 1.1% m/m, in line with expectations. However, the June advance report showed a strong +1.6% rebound, hinting at possible strength ahead. Still, trade tensions with the U.S. are having a real economic effect — with 32% of retail businesses in May reporting negative impacts, including higher input costs and weaker demand.
Traders should watch for a clear break of this short-term range to define the next momentum push. However take note that the pair has been seen one of up and down volatility not only spread out but intraday/intraweek. That suggests being nimble. Listen to the price action.
This article was written by Greg Michalowski at investinglive.com.
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