USDCAD Support Turned Resistance (May 28, 2015)

USDCAD has been climbing since the middle of the month but may be due to head south again, as the pair is hitting an area of interest. Price appears to be finding resistance at the 61.8% Fibonacci retracement level, which lines up with the broken support at the 1.2500 major psychological level.


At the same time, stochastic has reached the overbought zone, indicating that buyers are already exhausted. The oscillator could turn lower from the region and draw more sellers in, possibly allowing price to head back to its recent lows around the 1.1900 major psychological mark.


Note that the short-term exponential moving average has crossed above the long-term moving average on its daily time frame, suggesting that further gains are possible. This could allow the pair could climb all the way up to the next resistance area around the 1.2800 handle.


Earlier this week, the BOC expressed a slightly dovish tone in its monetary policy statement, citing that the currency’s appreciation is keeping a lid on growth and inflation prospects. The Canadian current account balance, US initial jobless claims, US pending home sales, and crude oil inventories data are the event risks for today.


By Kate Curtis from Trader’s Way