USDCAD weekly technical analysis: what are possible scenarios?

Canada reported its retail sales this past week which rose 2.2%. This nearly doubled expectations at the start of the year. What implication does this have on the USDCAD? For the week ahead, let’s look at our USDCAD weekly technical analysis

25 March, AtoZForex –Aside the impressive retail sales reported this past week, we also had consumer price growth eased slightly, the year over year rate remained at 2%. Taken together, the rise in spending and pickup in inflation should support the loonie going forward. USDCAD should continue to be well capped as the Bank of Canada are likely going to be less dovish.  The coming week, should, however, be the focus for the commodity currency traders. Canada’s GDP release, China’s PMI reports, and a speech from Bank of Canada Governor Poloz are all lined up for the week.

USDCAD weekly technical analysis

USDCAD weekly technical analysis USDCAD Daily technical analysis

This past week, USDCAD was choppy and begs for direction all through on the short-term charts. It, however, closed the week a little changed from its open. This makes the broader directional call a bit of a lottery at the moment until a decisive break happens. Although price looked firm on Wednesday by making an attempt to attack the 1.34 region from where it fell back abruptly over the course of the session. The past few days’ trading has seen USDCAD rally firmly rejected above the 1.34 figure and below 1.33 handle. we think sustained gains through the 1.34 zone would be significant for the USDCAD from a longer term perspective. Support remains firm around the 1.33 area and we spot stronger support around 1.327s.

USDCAD weekly technical analysis

USDCAD weekly technical analysis USDCAD weekly technical analysis

From the weekly frame of the USDCAD, combos of chart patterns could be clearly identified. Head and shoulders pattern clearly spotted alongside a rising wedge being formed with a prolonged consolidation of the right shoulder. However, the price is currently trading in no man’s land. As we all know, timing and spot-on entries are key elements of good trading. Hence, waiting is also a strategy on its own.

Based on our weekly chart, our reaction zones on the upside are 1.3475 (61.8% Fib). If this region continues to cap the upside, sooner or later, a breakdown is unavoidable. Alternatively, if there’s a push through and a weekly close above the 1.3475 resistance occurs, our focus should then be shifted to the top channel of the rising wedge around the 1.3700.

As price unfolds in the days and perhaps weeks ahead, stay glued and be sure you get all updates from us especially on the juicy USDCAD swing opportunity brewing up.

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