USD/CAD Daily Forecast – Time for Fry Pan Bottom Pattern Breakout

After maintaining a range-bound approach until the last North American session, the Loonie pair had taken the flight to the upside. From the 1.3200/1.3400 range levels, the USD/CAD pair elevated, touching 1.3164 level last night. Since then, until today morning, the pair hasn’t moved above and was strolling around the same 1.1364 handle.

Crude Oil prices were 0.39% higher than the last closing in the Asian trading session. The price upsurge came amid escalating Middle East tensions and weak global economic growth outlook.

“Growing challenges in the macroeconomic environment have kept bullish bets in check as risk appetites remain soft over potential weakness in global fuel demand,” said Benjamin Lu, commodities analyst at Singapore-based brokerage Phillip Futures. At around 06:15 GMT, the Crude WTI Futures were trading near $56.25 per barrel.

Significant Economic Events

The market remains attentive to the upcoming highly crucial US Q2 Annualized GDP figures. The Street analysts expect the GDP statistics to report 1.3% lower than the previous recorded 3.1% this time. Nevertheless, the consensus keeps a bullish stance over the Q2 QoQ Personal Consumption Expenditures Prices (PCE). The market anticipates this PCE to record 0.6% over the last 0.5%. Also, the consensus estimates the Core PCE to come around 2.0% over the previous 1.2%.

There are no CAD-specific economic events to challenge the pair’s daily price actions.

At around 17:00 GMT, the Baker Hughes US Oil Rig Count release might influence the daily volatility of the Crude prices. The Oil Count had recorded 779, last time.

Technical Analysis

1-Day Chart

The USD/CAD pair was forming a Fry Pan Bottom pattern. As per this pattern, the pair had already showcased some significant initial down moves, followed by a consolidation phase. Now, one should wait for a Gap-Up, followed by a strong upward rally. The Loonie pair had already broken a significant counter trendline and a 1.3147 support-turned-resistance yesterday. However, it might need a few more trading sessions to assure an imminent uptrend.

On the upside, the pair might have to surpass the significant SMA conflux, to keep hold of the decisive breakout. On the contrary, any failure for an upward drift, disrupting the aforementioned trading strategy would trigger for another set of sharp pullbacks.

2-Hour Chart

As per the 1-Day Chart, chances for an uptrend remains in the cards for the long term. Also, in the near term, the pair jumped above the 50-day SMA in order to justify the bullish Gann Square level 1. Anyhow, a robust Gann line was restricting the upside, putting a lid over the pair’s daily gains.