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USD/CAD Daily Forecast – Sturdy 1.3238 Resistance Forbidding the Bulls

Nikhil Khandelwal

During the Asian session, the Loonie pair continued to hold on the gains accumulated over the last two sessions. Quite interestingly, the USD/CAD pair was lingering between 1.3209 and 1.3224 range levels in the early hours.

On Thursday, the US President Trump had slammed China with tariffs over yet another $300 billion of Chinese imports. Trump remained stubborn over his stance to keep imposing tariffs until a proper deal reached.

US Dollar Index 240 Min 2 August 2019

Meantime, the USD Index cooled down from a 2-year high to a 2-month high today. Anyhow, a 15-day old slanting ascending support line, helped the Greenback to limit its daily losses.

On the backdrop of the additional tariffs on Chinese goods, the Crude prices had dropped more than 7%, reaching $53.63 bbl yesterday.

OIL 240 Min 2 August 2019

The oil prices appeared to heads up slightly today. However, the chart was displaying a breakdown out of a 50-day old slanting support line strengthening the bears.

Significant Economic Events

Today, the US economic docket appears wholly filled with vital data releases. The July YoY Average Hourly Earnings and Non-Farm Payrolls data releases remain the main attraction for the day. Notably, the market expects the Earnings report to record 0.1% higher than the previous 3.1%. Nevertheless, the Street analysts anticipate the July Payrolls to report 60K below the last 224K. Despite that, the consensus estimates the July Unemployment Rate to remain in-line with its previous figures.

Another significant data release remains the US June Trade Balance. The market hopes this trade statistics to come around $-54.6 billion over the prior $-55.5 billion. Also, the June Michigan Consumer Sentiment Index and June MoM Factory Orders remain in the watchlist for the day.

On the other hand, the analysts stay bearish over the Canadian June International Merchandise Trade data.

At around 17:00 GMT, the Baker Hughes US Oil Rig Count will come out with a potential to tweak the oil prices. This Crude data had recorded 776, last time.

Technical Analysis

4-Hour Chart

USDCAD 240 Min 2 August 2019

The USD/CAD pair kept the positive trend intact after taking a bounce off from a major counter trendline two days back. Anyhow, a robust 1.3238 resistance confined the pair’s upside, pushing it downwards. Despite that, the 50-day SMA had crossed and moved above the significant 200-day SMA, making a “Golden Cross“. Also, the histograms of the MACD technical indicator were pointing north-side, cheering up the bulls. Notably, the Relative Strength Index (RSI) indicated 61.77 levels, showing growth in the buyer’s interest.

1-Hour Chart

USDCAD 60 Min 2 August 2019

The pair was moving above the Green Ichimoku Clouds. Also, the Parabolic SAR remained below the pair, maintaining a good distance. Such a setup invokes for a near-term long position. But, before that, traders must wait for some more time until the trade turns into a trending one from a flat one.

This article was originally posted on FX Empire