Looking at the US dollar (USD) on the above hourly USD/CAD MT 4 price action chart, is failing to extend is recovery above 1.2735.
The US dollar has fallen, during today’s morning Asian trade session, towards the downside barrier in play at 1.2730. However, at least for now, the USD/CAD currency exchange rate is still trading within its falling trend channel in play since 22 December.
The New Year is starting off with a number of events on the economic calendar. The United States is publishing final monthly purchasing managers’ index (PMI) data as well as monthly construction data. Federal Open Market Committee (FOMC) member Charles Evans is also speaking. Canada is releasing their final monthly purchasing managers’ index (PMI) data as well.
The European Union is publishing monthly purchasing managers’ index (PMI) data as is their third largest country, Spain. The United Kingdom will release monthly mortgage approvals and money supply numbers for the month.
Daily US Dollar Technical Analysis (USD/CAD)
Looking at the above hourly USD/CAD price action chart, the relative strength index (RSI) is normal and not signaling overbought. This could be good signal for US currency bulls and cap losses.
With that said, there is a bearish chart formation in play in this key Forex market. The descending trend lines from 28 and 21 December lining up at 1.2755 and 1.2810 are upside barriers.
Given the sustained trading below the upside trend line within the descending trend channel, along with a normal RSI, the first downside barrier lines up at 1.27. The next layer of technical support lines up at 15 December low at 1.2690.
Channel resistance comes into play at 1.2795 with the next layer of technical resistance lining up a 1.2810. A sustained close above 1.2810 will bring the December monthly high price point that lines up at 1.2960 into focus.