USD/CAD Daily Forecast – Consolidation might soon Convert into a BreakdownOn the 1-Month Chart, the bulls seemed to remain ahead of the bears. Anyhow, in the daily chart, the near-term 50-day SMA was moving downwards, crossing the 100-day and 200-day SMAs, making a “Death Cross” condition.
After triggering a slump rally from the 12-day high near 1.3109 level on July 19, the stumbling USD/CAD appeared to pause near 1.3054/68 range level. The pair opened up on Monday near 1.3054 level and remained muted in the Asian session, taking rounds near the opening mark.
Meanwhile, Crude prices skyrocketed today on concerns over demand disruption fears out of the rising Middle East tensions. Last week, Iran had captured a British-flagged oil tanker in retaliation to the earlier British seizure of the Iranian tanker. Also, recently, Libya reported the closing down of its largest oil field, bestowing the Crude price growth.
Significant Economic Events
Today, the overall Forex market might remain quite silent as the economic calendar lacks significant driving events. Anyhow, three low-volatile USD-specific and one CAD-specific event would attempt to tweak the USD/CAD daily movements.
The Chicago June Fed National Activity Index will come out at around 12:30 GMT. This Index had recorded -0.05 points, last time. Traders also look forward to the 3-month and 6-month Treasury Bill Yield figures about to release at around 15:30 GMT.
On the CAD front, Statistics Canada will release the May MoM Wholesale Sales today. The market remains highly bearish over the May Sales data, expecting 0.2% over the last 1.7%.
From this broader view, bulls seem to remain ahead of the bears. Since last year, the USD/CAD pair was forming an ascending triangle trading pattern. Such a pattern signals for a breakout to the upside in the short term. If the pair takes a strong movement to the north, then the pair needs to tackle the 1.3793 and 1.4163 resistances. Anyhow, the near-term 50-day SMA was attempting to travel overhead the pair, aiming to push the pair downwards. In short, the long-term picture stays evident for positive price actions.
Here in the daily chart, the near-term 50-day SMA was moving downwards, crossing the 100-day and 200-day SMAs, making a “Death Cross” condition. Hence, in the upcoming sessions, traders might witness some abrupt downfalls in the pair’s daily movements. Also, the USD/CAD pair heads south, staying within the two-month old downtrend channel.
Since the last few trading sessions, the Loonie pair had made rigorous attempts to break move above the 50-day SMA. And, quite a few times, the pair had accomplished in showcasing such bullish price action.
However, on moving upside, the 100-day SMA ensured to confine such a positive movement, pushing it down. If at all the pair moves even above the 100-day SMA, then the 200-day SMA stalled near 1.3183 level would get activated. The pair appears to maintain some consolidation phase since the start of July.
In a nutshell, the pair might continue to consolidate, allowing the bears to gather power to drag down the pair in the upcoming sessions.