USD/CAD congestion thinning out

Ross J Burland FXStreet

FXStreet (Guatemala) - USD/CAD is trading at 1.0820, down -0.14% on the day, having posted a daily high at 1.0844 and low at 1.0806.

USD/CAD is pressing lower again through the consolidation and congestion in the 30 pip range from the handle. Looking ahead, Canada's CPI for May is released along with April retail sales. RBS strategists explained that after base effects helped boost headline inflation in April, they see the risks favouring a slightly weaker than consensus result in May. “Either way, the June statement indicated the Bank of Canada appears fully committed to looking through near-term inflation pressure amid a still tepid growth outlook. The sales impact of the late Easter may lead to a boost in April Canadian retail sales. While USD/CAD has tested the 2014 lows, short term interest rate support has moved in favour of the USD over the past few weeks. (see chart in attached pdf) The positive carry environment, and still negative CAD positioning, may keep the CAD supported but we are cautious on chasing CAD gains further from current levels, particularly as rate differentials have moved against it. We are neutral on at current levels, with a medium-term bias to sell CAD”.

USD/CAD Levels

With spot trading at 1.0820, we can see next resistance ahead at 1.0830 (Hourly 20 EMA), 1.0833 (Yesterday's Low), 1.0835 (Daily Open), (Monthly Low) and 1.0835 (Weekly Low). Support below can be found at 1.0814 (Weekly Classic S1), 1.0813 (Daily Classic S1), 1.0806 (Daily Low), 1.0790 (Daily Classic S2) and 1.0777 (Daily 200 SMA).

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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