USD/CAD: Bulls target 1.3470 after breaking 12-week old trendline
|- Weak Canadian data helped the USD/CAD pair to cross near-term important resistance.
- Current month high around 1.3470 gains immediate market attention.
Successful break of 12-week old descending trend-line resistance enables the USD/CAD pair to visit 1.3430 level during early Monday. Buyers now aim for current month high near 1.3470 while developments surrounding the US-China trade deal and comments from the Fed policymakers could provide fresh impulse to traders.
On Friday, USD/CAD provided a daily closing beyond a downward sloping trendline stretched since early January. The quote sustains the breakout so far during initial Asian sessions on Monday, signaling strength of the move.
Soft Canadian retail sales and inflation numbers could be considered as a reason for the pair’s latest advances. Adding to the USD strength could be positive news from the US-China trade front.
As per the latest report from Bloomberg, Chinese delegation led-by Vice-Premier Liu He will visit Washington on April 03. It should also be noted the US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will negotiate trade in Beijing on March 28.
Next up in the line will be comments from the Fed policymakers at the Federal Reserve Bank of Chicago and Philadelphia, namely Charles Evans and Patrick Harker. While Evans is known to be a policy dove, Harker’s tendency to appear less in public makes their speeches important. At the economic front, the US Chicago Fed National Activity Index for February should gain investor’s attention as the reading dropped negative to -0.43 during the previous release.
Additionally, concerns of sharp economic slowdown weigh on crude prices, Canada’s largest export item, which in turn becomes an extra position for the USD/CAD buyers.
USD/CAD Technical Analysis
While the break of immediate resistance-line enables the Loonie buyers to aim for 1.3470, 1.3500, 13530 and 1.3570 could challenge the bulls during further upside.
In a case pair drops beneath 1.3420 resistance-turned-support, 1.3390 and 1.3370 might reappear on the chart ahead of highlighting 50-day simple moving average (SMA) level of 1.3280.
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