USD/CAD Daily Forecast – Cup-and-Handle Pattern might soon Drag Down the PairToday, the Greenback continued to move resiliently upwards and was trading near 98.87 level in the morning session. On the hourly chart, the USD/CAD was struggling to make breakthrough above the 1:1 Gann Line.
After a 0.66% magnificent growth in the price actions last night, reaching 1.3124 mark, the USD/CAD pair kept a hold on the accumulated gains today. Notably, the pair was attempting to make an additional growth above 1.3220 level in the Asian session. Somehow, the efforts appeared to go in vain, allowing a rebound price action.
In the meanwhile, the US Dollar Index had gained extra strength following the Fed rate cut decision. The policymakers had lowered the interest rates by 25 bps, leaving room for more cuts in the future.
Today, the Greenback continued to move resiliently upwards and was trading near 98.87 level in the morning session. Such a strong movement in the USD Index marks an excellent start for August with RSI indicating a whopping 82.86 level.
Significant Economic Events
Today, the US Jobless Claims would capture the overall market’s attention at around 12:30 GMT. The Street analysts stay slightly bearish over this July Unemployment statistics. The market expects the Initial Jobless Claims computed since July 26 to report 8K higher than the previous 206K. Also, the consensus estimate the Continuous Jobless Claims calculated since July 19 to come around 1.678 million over the last 1.676 million.
Next up in the US economic docket remains the July ISM Manufacturing PMI. The market analysts expect this Index to record 0.58% above the market hopes of 51.7 points.
On the other hand, the slightly bullish expected Canadian July Markit Manufacturing PMI would report at around 13:30 GMT. Meantime, traders can take a back seat amid the absence of oil-catalyst events like EIA/API Crude reports.
Quite noticeably, the USD/CAD was forming a Cup and Handle trading pattern. The robust 1.3224 resistance handle or the neckline might soon reject the pair’s upside.
Another point of interest remains over the north heading 50-day near-term SMA after crossing above the 200-day SMA. Hence, on the contrary, that marks a bullish point, considering the formation of a “Golden Cross“. Along with the overnight upliftment in the pair, the Relative Strength Index (RSI) also upshot from 38.35 level to 66.36 level, showing rising buyer interest.
After taking a bounce off from the 2:1 Gann Line, the USD/CAD was struggling to make breakthrough above the 1:1 Gann Line.
However, any downside price action would enable challenge over a stable support confluence made up of the 50-day and 100-day SMA. Also, the RSI remained steady at 68.74 levels, taking the pair to the buyer’s territory. Anyhow, the north-facing histograms of the Moving Averages Convergence Divergence (MACD) continued to encourage the bulls.