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USD/CAD Daily Forecast – Bearish Rising Wedge Pattern Set into Action

By:
Nikhil Khandelwal
Updated: Jul 3, 2019, 08:02 UTC

The Crude Oil price chart movement was forming a symmetrical triangle trading pattern after displaying a sharp pullback yesterday. Traders eye the significant June ISM Non-Manufacturing PMI figures.

Stock Market Data

Last day, the Loonie pair continued undergoing severe pullbacks, breaking the sturdy 1.3107 support mark. Laterwards, the downfall got supported near 1.3095 handle in the Asian session. At the same time, the pair managed a rebound action from that point entertaining the bulls. The USD/CAD pair had then reached 1.3112 level in the early hours. Somehow, further advances got limited as the pair failed to make a break-through out of the 1.3114 resistance level.

The Crude Oil price chart movement was forming a symmetrical triangle trading pattern after displaying a sharp pullback yesterday. The move came into action after the OPEC+ members agreed on extending production cuts to meet the desired targets.

OIL 60 Min 03 July 2019
OIL 60 Min 03 July 2019

The OPEC+ meeting showed the members sticking together in tough times, characterized by weakening global demand outlook, aiming for a more balanced oil market, despite clear market share implications,” Amarpreet Singh, an analyst at Barclays Commodities Research, said in a note.

Key Economic Events

Today, the economic docket remains filled with US-specific significant events. The most crucial one is the June ISM Non-Manufacturing PMI. The Street analysts stay slightly bearish over the figures, expecting 55.9 points over the previous 56.9 points. Other major events to look for, are the June ADP Employment Change data, May Trade Balance, Jobless Claims, and May MoM Factory Orders.

At around 12:30 GMT, the May International Merchandise Trade reports will come out. The market expects a -$1.50 billion this time, over the last -$0.97 billion.

EIA Crude Oil Stocks Change data release computed since June 28 would act as an active catalyst for the commodity’s price actions. The Street hopes the report to come near -2.484 million in comparison to the previous -12.788 million.

Technical Analysis

2-Hour Chart

USDCAD 120 Min 03 July 2019
USDCAD 120 Min 03 July 2019

Today, the USD/CAD pair appeared to have paused the downtrend that had begun from 1.3144 level. Anyhow, the 200-day SMA that hovered above the Loonie pair ensured to limit any immediate price actions on the upside. It seemed as if the neutral RSI pointing near 50 level was playing its role in keeping the pair less volatile. In case, if the pair happens to break the robust 1.3145 resistance, then that might flash on the buyer’s radar to target 1.3227 mark. Quite notably, the 50-day SMA moved hand-in-hand with pair confirming low volatility in the short period.

1-Day Chart

USDCAD 1 Day 03 July 2019
USDCAD 1 Day 03 July 2019

The overall trend remains bearish as the pair movements had formed a rising wedge pattern. The overhead 200-day SMA has already started playing its role dragging down the pair from 1.3400 level to 1.3065 level. If the pair continues drowning past-1.3065 level, that will enable it to challenge the next support line at 1.2785 mark.

About the Author

Nik has extensive experience as an Analyst, Trader and Financial Consultant for Global Capital Markets. His vision is to generate Highest, Consistent and Sustained Risk-Adjusted Returns for clients over long term basis and providing them world-class investment advisory services.

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