13, June 2016

USD/CAD (a 4-hour chart)

USD/CAD (a 4-hour chart)

General overview

On one hand Initial Jobless claims in the USA supported the dollar that grew in the USA/CAD. On the other hand the oil quotes decrease dispelled the demand for the Canadian dollar. Both these factors helped the pair to recover.

Current situation

The USD/CAD showed volatile trades last Friday. The pair fell in the European session, still sellers were not able to move the price below 1.2680. The USD/CAD quotes reversed some of the losses in the American session when the price started to grow. The trades ended at the level of 1.2780. The resistance stands at 1.2800, the support comes in at 1.2680.

MACD is in the negative area, the histogram is growing. That is a buy signal. The indicator RSI is in the neutral area. The price is below Moving Averages (50, 100 and 200) on the 4 hour chart. The price is on the strong level from 2015 on the daily chart.

Trading recommendations

We believe the pair will correct as it is oversold and is on the strong support on the daily chart. The MACD is growing. The RSI bounced off the oversold area. In addition the price went too far from the Moving Averages and shall grow to them. We believe the pair shall reverse to 1.3000.

As an alternative scenario the pair may decrease to the round level 1.2500.