• The Canadian dollar is recording goodish gains in the week of 0.85%.
  • A positive market sentiment boosted the appetite for high-beta currencies, like the CAD.
  • USD/CAD Price Forecast: To face solid support around 1.2694-1.2700.

The USD/CAD edges lower in the North American session, extending its weekly losses for the third consecutive week as investors shrugged off an “aggressive” US Federal Reserve, as Core PCE rose to 4.9% but ticked down from 5.1% YoY. At the time of writing, the USD/CAD is trading at 1.2727.

US equities remain positive, reflecting a risk-on mood. The S&P 500 is about to erase its May losses, as the US Commerce Department informed that inflation increased at a slower pace than in March. Will the Fed slow the pace of hiking rates after reaching the 2% threshold?

Although inflation is heading lower, ING analysts noted that some factors lurk in the economic environment. First, the geopolitical backdrop keeps pushing energy prices higher. Second, China’s zero-covid policy slowed down the improvement in the supply chains, and thirdly, the tight labor market needs to mitigate a wage-price spiral.

Elsewhere, the USD/CAD on Friday began trading near the day’s highs at 1.2784 but slid towards three-week new lows around the 1.2720 area.

USD/CAD Price Forecast: Technical outlook

USD/CAD remains upward biased, though its two-week downtrend will face a solid support area in the 50 and the 100-day moving averages (DMAs), around the 1.2704-1.2693 area. Nevertheless, USD/CAD bulls need to be careful and not overconfident that the aforementioned level would hold. Why? The Relative Strength Index (RSI) at 44.29 is aiming lower, well within bearish territory, and with enough space before reaching oversold conditions.

If the USD/CAD two-week downtrend extends, the major’s first support would be the 1.2693-1.2704 area. Break below would expose the 200-DMA at 1.2658, followed by the April 22 low at 1.2566. On the flip side, the USD/CAD first resistance would be 1.2800. Once cleared, the following supply region would be the 20-DMA at 1-2862, followed by the March 8 high at.1.2901.

Key Technical Levels

USD/CAD

Overview
Today last price 1.2727
Today Daily Change -0.0050
Today Daily Change % -0.39
Today daily open 1.2774
 
Trends
Daily SMA20 1.2871
Daily SMA50 1.2704
Daily SMA100 1.2696
Daily SMA200 1.2663
 
Levels
Previous Daily High 1.2849
Previous Daily Low 1.2769
Previous Weekly High 1.2982
Previous Weekly Low 1.2776
Previous Monthly High 1.288
Previous Monthly Low 1.2403
Daily Fibonacci 38.2% 1.2799
Daily Fibonacci 61.8% 1.2818
Daily Pivot Point S1 1.2745
Daily Pivot Point S2 1.2717
Daily Pivot Point S3 1.2665
Daily Pivot Point R1 1.2825
Daily Pivot Point R2 1.2877
Daily Pivot Point R3 1.2906

 

 

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