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Canadian Dollar Losses being Capped against the USD

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Looking at the Canadian dollar (CAD) on the above USD/CAD hourly MT 4 price action chart, this key Forex market is still being capped below the upside congestion zone in play at 1.3175 to 1.3180.

The U.S. dollar (USD) is seeing gains capped against the Canadian dollar at that above mentioned congestion zone where the one hundred (100) hour exponential moving average (EMA).

Canada is not releasing any economic data as we head into the weekend. The United States will release monthly flash services and manufacturing purchasing managers’ indices (PMI).The European Union is also releasing their monthly flash services and manufacturing purchasing managers’ indices (PMI). This includes the Eurozone, France and Germany.

The United Kingdom will see their monthly Gfk consumer confidence index as well as monthly retail sales data.

Daily Canadian Dollar Technical Analysis (USD/CAD)

Looking at the above hourly chart the U.S. dollar is having difficulty extending its okay rebound against the Canadian dollar seen on Thursday from a six week low price point. There are bearish technical indicators, including the MACD histogram and the relative strength index (RSI). These indicators are having problems gaining traction to the upside.

With that said, if the USD/CAD currency exchange rate sees a daily close above the upside congestion zone in play at 1.3175 to 1.3180 the bulls could be enticed to come back into this Forex market. The next upside barrier lines up at the key 1.32 level.

The layer of technical resistance lines up at congestion in play at 1.3235 to 1.3240. This is a former support area now upside congestion zone.

On the flipside the first layer of technical support lining up at 1.3125 with the key and psychological level at 1.31 coming up. The next downside barrier then comes into focus at 1.3080. A sustained close below the latter support barrier could bring the bears fully into the USD/CAD Forex market.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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