USD / CAD has reached a daily high of 1.2612, the level of April 21, which coincides with the 200 EMA (strong resistance) on daily charts. This level is the key because below there could be a correction to the 6/8 murray support zone.
The eagle technical indicator on daily charts has reached the 95 level, showing an overbought signal and an imminent downward correction for the next few days.
The loonie is weakening after Bank of Canada Governor Tiff Macklem said that the rise in inflation could be temporary, but could otherwise raise interest rates. His comments further weakened USD / CAD and went to look for the 7/8 murray resistance zone around 1.26.
The surge in demand for the US dollar, amid the prevailing environment of risk aversion, provided an additional boost to the USD / CAD pair. It is now showing signs of exhaustion of the bullish force.
On the chart, you can see the yellow area where the 21 SMA is located. At this level, there is likely to be a technical rebound, if the pair consolidates again above this level it is likely an upward movement to climb to the Murray 8/8 zone at 1.2693.
Conversely, if the loonie breaks the support zone of the 21 SMA around 1.2645, we expect a bearish move to the support zone of the 200 EMA on 4-hour charts (1.2490) and up to 6/8 of murray around 1.2451.
Our recommendation is to watch the key level of 1.2565, if it consolidates below this level we can sell with short-term targets up to 1.2450.
Support and Resistance Levels for July 16 - 19, 2021
Resistance (3) 1.2680
Resistance (2) 1.2635
Resistance (1) 1.2619
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Support (1) 1.2522
Support (2) 1.2454
Support (3) 1.2409
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Trading tip for USD/CAD for July 16 - 19, 2021
Buy above SMA 21 at 1.2665, with take profit at 1.2693 (8/8), stop loss below 1.2630.
Sell below or if breaks 1.2545 (SMA 21), with take profit at 1.2490 (EMA 200), and 1.2451 (6/8) stop loss above 1.2582.
