USD/CAD Price Analysis: Bulls moved in, reaches two-day high as a bullish-engulfing pattern looms

Bullish-engulfing candlestick pattern on the daily chart suggests buyers are in control.
The first major resistance at 1.3600, followed by several key levels up to 1.3804.
Downside risks include a drop below 1.3489, potentially targeting the 200-DMA at 1.3462 and the 50-DMA at 1.3345.

Christian Borjon Valencia FXStreet

The Canadian Dollar (CAD) losses ground against the US Dollar (USD) sponsored on weaker than expected Canadian economic growth in the second quarter, alongside a mixed US jobs report and improvements in business activity. Hence, the USD/CAD is trading at 1.3595 after hitting a daily low of 1.3489, above its opening price by 0.65%.

USD/CAD Price Analysis: Technical outlook

The daily chart portrays the pair as neutral to upward biased, though the major reached a lower low at 1.3489, slightly below the August 8 daily high at 1.3502. However, the USD/CAD recovery was outstanding, forming a bullish-engulfing candlestick chart pattern, which engulfed the price action of the previous two days. Hence, buyers are in charge.

The USD/CAD first resistance would be the 1.3600 figure. A breach of the latter will expose the August 25 high at 1.3640, closely followed by the May 26 swing high at 1.3654 and the April 28 high at 1.3667. Once those levels are cleared, the 1.3700 figure would be up next before rallying towards the March 24 daily high at 1.3804.

Conversely, if the USD/CAD drops below 1.3489, the pair could shift downwards and extend its losses toward the 200-day Moving Average (DMA) at 1.3462. Once cleared, the next stop would be the psychological 1.3400 area, and up next, the 50-DMA at 1.3345.

USD/CAD Price Action – Hourly chart

USD/CAD

Overview
Today last price	1.3594
Today Daily Change	0.0085
Today Daily Change %	0.63
Today daily open	1.3509

Trends
Daily SMA20	1.3503
Daily SMA50	1.3338
Daily SMA100	1.3394
Daily SMA200	1.3462

Levels
Previous Daily High	1.3558
Previous Daily Low	1.3504
Previous Weekly High	1.364
Previous Weekly Low	1.3496
Previous Monthly High	1.364
Previous Monthly Low	1.3184
Daily Fibonacci 38.2%	1.3525
Daily Fibonacci 61.8%	1.3537
Daily Pivot Point S1	1.3489
Daily Pivot Point S2	1.347
Daily Pivot Point S3	1.3436
Daily Pivot Point R1	1.3543
Daily Pivot Point R2	1.3577
Daily Pivot Point R3	1.3596

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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