USD/CAD Daily Forecast – Underlying Parabolic SAR Probing the Bears

“Unless you believe a trade deal will happen the slowdown in the global economy continues… and earnings all over the globe will be under pressure,” said Greg McKenna, strategist at McKenna Macro.

Significant Economic Events

On Tuesday, the market stays attentive towards the US June Housing data releases. At around 13:00 GMT, the June YoY S&P/Case – Shiller Home Price Indices will come out. This time, the street analysts expect the Index to remain in line with the previous 2.4%. In the timeframe, the June MoM Housing Price Index would remain another point of interest for the traders. The market stays quite bullish over the Price Index, expecting 0.3% over the prior 0.1%. Laterwards, Consumer Confidence will get published that denotes the level of consumer confidence over economic growth.

In the North American session, the oil-catalyst API Weekly Crude Oil Stock computed since August 23 might attempt to tweak daily oil price movements.

Technical Analysis 

1-Day Chart

After testing the sturdy 1.3347 resistance handle in the previous trading sessions, the USD/CAD appeared to slow down and rebound downwards.

On the path to the south side, the pair was struggling to break below 1.3238 support mark in order to revisit a 38.2% Fibonacci level or 1.3221 level. Anyhow, the below-lying Parabolic SAR was questioning the bears. In the meanwhile, the Relative Strength Index (RSI) had dropped significantly from 60 level to 50 level in the last few sessions, showing declining buyer interest.

3-Hour Chart

Healthy 1.3350 resistance level was putting a lid on the pair’s daily gains since August 7, restricting the upside.

Currently, the USD/CAD pair has dived below the Green Ichimoku Clouds, inviting the bears to take over control. Nevertheless, the overhead Parabolic SAR provided additional strength to the bears. Quite noticeably, the Stochastic indicator was displaying massive over-sold conditions, luring the sellers.