The USD / CAD pair has strengthened and has fallen to the minimum of 1.2430. This downward movement is due to the general weakness of the US dollar and the increase in crude prices that reached a weekly maximum of 73.67.
On Wednesday, FOMC Chairman Jerome Powell did not offer encouraging details, his tone was moderate and he decided to leave his policies unchanged, which weakened the US dollar. It again came under downward pressure, so it continued to weaken against its rival currencies. The USDX index reached the low of 91.81.
The Canadian dollar has an inverse correlation against crude. Oil prices determine a direction of the pair. Therefore, it is important to always monitor WTI price to have a short-term outlook for the pair.
In the chart above, you can see the formation of a bearish wedge. The USD / CAD has been trading within this pattern. Now it has found support at the 6/8 Murray zone and is making a technical bounce.
The SMA of 21 located at 1.2455 will be the key point that will determine if the pair is in the overbought zone or there could be a continuation of the downward movement.
Therefore, a consolidation above 1.2455 will be a good opportunity to buy with targets at 1.2570, the zone of 200 EMA and 7/8 Murray.
Our recommendation is to buy around the 1.2430 zone. As long as it remains above 1.24, there could be a bullish bounce. The eagle indicator is showing an oversold signal and a technical rebound is imminent in the next few days.
Support and Resistance Levels for July 30, 2021
Resistance (3) 1.2601
Resistance (2) 1.2565
Resistance (1) 1.2503
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Support (1) 1.2401
Support (2) 1.2368
Support (3) 1.2349
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Trading tip for USD/CAD for July 30, 2021
Buy above SMA 21 at 1.2455 or buy if rebound 1.2430, with take profit at 1.2500 and 1.2570 (7/8), stop loss below 1.2400.
