The USD / CAD pair, after having broken the symmetrical triangle, is now consolidating above the SMA of 21 and below the +1/8 of murray, yesterday in our analysis we pointed out this technical pattern, you can review our article and take out some tips that can help you identify these technical figures.
The bullish rally of the USDX dollar index took it to the high of 93.15, which gave USD / CAD upward momentum. The currency pair reached an extremely overbought level at +1/8 murray (1.2817), then made a correction towards the support zone of 1.2671.
At this time of writing, the pair is trading at 1.2681, bouncing above the 21 SMA. As long as USD / CAD remains above this level, we expect a new bullish wave to the resistance zone of 1.2760 and 1.2810.
In the 4-hour chart, you can see the uptrend channel that the USD / CAD pair has since June 9 when it broke up the 200 EMA and the 1.20 psychological level. Since then, it has continued to trade within this channel. We believe that the upward movement could continue to the 1.2850 area, but first we must wait for a correction towards the lower line of the bullish channel around 1.2500.
Given that the Canadian dollar is extending weakness, our recommendation is to buy USD/CAD above the SMA of 21, around 1.2671. As long as the pair consolidates or trades above this zone, it will suggest a good opportunity to buy.
On the contrary, a breakout and consolidation below the 21 SMA below 1.2670 will be a good opportunity to sell with targets at the 7/8 murray support around 1.2573 and up to the psychological level of 1.2500, zone of the trend line of the bullish channel.
Support and Resistance Levels for July 21 - 22, 2021
Resistance (3) 1.2774
Resistance (2) 1.2749
Resistance (1) 1.2712
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Support (1) 1.2638
Support (2) 1.2600
Support (3) 1.2551
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Trading tip for USD/CAD for July 21 - 22, 2021
Buy above SMA 21 at 1.2685, with take profit at 1.2750 and 1.2810 (+1/8), stop loss below 1.2648.
Sell below 1.2670 (SMA 21), with take profit at 1.2573 (7/8) and 1.2500, stop loss above 1.2705.
