The USD / CAD pair is trading above the 200 EMA and above the strong support of 2/8 of murray. We can notice that the pair is now consolidating. This level of 1.2460 is the key. If USD / CAD breaks and holds below this level, the outlook may be bearish in the short term.
The US dollar USDX index is recovering from last week's sharp decline. It is now trading above 92.00. The market expected that the data published regarding the price index of the underlying personal consumption expenditure (PCE) would come out negative for the dollar. However, the reading was an annual rise of 3.5% in June, this actual reading was lower than the market expectation of a 3.7% increase.
This week, the US dollar is likely to make a correction to the 61.8% Fibonacci. This would be expected to continue bouncing until reaching the resistance zone of 92.62. A bullish move could weaken USD / CAD, and it could rise to the 8/8 murray zone, located at 1.2695.
The key level is the area where the 200 EMA and the 2/8 Murray converge. Below this level, downward pressure is expected to prevail and USD / CAD could reach the 1.2329 support zone.
Above the key point of the 200 EMA and the 2/8 Murray, we should also expect a consolidation above the 21 SMA around 1.2488, so the market will give us an opportunity to buy with a targets at 1.2645 and 1.2695.
The market sentiment regarding the USD / CAD pair for today, Monday August 02, shows that there are 69.82% of operators who are buying the pair. This is a sign that the pair could rise to the resistance zone of 1.2650 in the short term, and then resume with the downtrend.
The technical reading of the eagle indicator is showing an oversold signal, a correction is likely in the next few hours.
Support and Resistance Levels for August 02 - 03, 2021
Resistance (3) 1.2566
Resistance (2) 1.2528
Resistance (1) 1.2497
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Support (1) 1.2428
Support (2) 1.2390
Support (3) 1.2359
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Trading tip for USD/CAD for August 02 - 03, 2021
Buy above 1.2488, (SMA 21), with take profit at 1.2640 and 1.2695(8/8), stop loss below 1.2450.
Sell if breaks below 1.2451 (6/8), with take profit at 1.2329 (5/8), stop loss above 1.2590.
