I’m looking at a simple trend setup on the 4-hour time frame of USD/CAD, as the pair tests the top of its descending channel.
USD/CAD Trade Idea
USD/CAD 4-hour Forex Chart
It looks like the technical signals are lining up for a continuation of the downtrend on USD/CAD!
The pair is hovering close to the top of its descending channel, which happens to coincide with the 61.8% Fib, the 200 SMA dynamic resistance, an area of interest, and the 1.2600 major psychological mark.Are sellers ready to hop in right here?
The 100 SMA is below the 200 SMA to confirm that the selloff is likely to resume while Stochastic is reflecting exhaustion among buyers. If the ceiling holds, USD/CAD could find its way back to the swing low at 1.2365 or the channel support.
There are no top-tier economic releases from both the U.S. and Canada over the next trading sessions, but policymakers from the Fed and BOC have speeches lined up.
FOMC officials have been assuring market watchers that there’s no need for policy tightening for now, disappointing most dollar bulls.
Meanwhile, there might be a slightly bullish bias on the oil-related Loonie on account of the blockage in the Suez Canal that could limit global exports of the commodity, thereby putting upside pressure on prices.
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