28, July 2016

USD/CAD (a 4-hour chart)

USD/CAD (a 4-hour chart)

General overview

The USD/CAD outlook was neutral during the day as the pair waited for the Fed policy statements. In addition, lower oil prices weighed on the CAD.

Current situation

The instrument traded near 4-month highs during the day. The pair made an attempt to resume its growth after a correctional decline. The instrument grew from 1.3156 and gained about 0.18% by the end of the day. However, the Fed decision to leave the rates unchanged weighed on the Canadian dollar which fell against its American counterpart. The resistance is at 1.3300, the support comes in at 1.3200.

MACD decreased which indicates the buyers’ positions weakening. The indicator still gives a buy signal. Oscillator RSI bounced downwards from the overbought area which is a sell signal.

Technically, the 1 hour chart showed that the pair traded close to the 50-EMA during the day. However, the price broke the line and decreased on the back of the Fed decision. The 50, 100 and 200 EMAs are moving upwards in the 1 hour chart.

Trading recommendations

Even though the tone is still positive the pair may develop a downward correction towards the support 1.3100.