The North American dollar pair (USD/CAD) has been considered infrequently recently. So for today's article, we will take a closer look at this instrument, where the main focus will be on its technical outlook. It was already noted in the two previous today's materials on the euro and the pound that the results of the US Federal Reserve meeting will be the main event on April 28 and the whole week, which also includes a press conference by Fed Chairman Jerome Powell. Despite the fact that today is the middle of the trading week, we will begin the technical analysis of the Canadian dollar from the weekly time frame.
Weekly TF
Analyzing this time frame, the USD/CAD pair is in a clearly pronounced bearish trend, as can be seen from the descending channel in which the quote is traded. However, a consolidation occurs after reaching the low at 1.2364, which usually takes place before the start or continuation of the subsequent directional movement. Here, it is very clear what strong resistance to growth attempts is provided by the red line of the Tenkan Ichimoku indicator. The last weekly candle emphasizes this well, when the same significant upper shadow remained from it after a fairly impressive growth, and the body of the candle eventually turned out to be bearish.
Earlier, the pair is under pressure and is approaching the support level of 1.2364. There is a high possibility that this level will be retested for a breakdown. If this succeeds this time, the quote will continue to decline. In turn, the bullish scenario will be implemented only if the price rises from the downward channel, followed by a breakdown of the resistance level of 1.2652, where the highs of the previous weekly trading were shown. Judging by the weekly time frame, the pair has a better chance of continuing the downward scenario based on the technical analysis, but this will only occur if today's events related to the Fed put pressure on the US dollar.
Daily TF
The daily time frame clearly shows that the USD/CAD pair went into a consolidation stage, after declining on April 26. Such a scenario is appropriate before the events this evening. Meanwhile, the upward scenario implies the return of the quote above the most important psychological and technical level of 1.2500, after which the bulls of this instrument will have to test the breakout of the blue line of the Kijun indicator of the Ichimoku indicator, overcoming the level of 1.2517. But this is not all, as the lower border of the Ichimoku indicator's daily cloud passes just above, which can also provide strong resistance to growth attempts. The real breakdown of the support level of 1.2364 and consolidation of three consecutive daily candles below this level will signal the continuation of the downward trend.
Trading recommendation:
It is recommended to consider the main sales for the USD/CAD pair, which are better to open on a pullback to the truly broken support level of 1.2364 or at higher prices, after the short-term pullbacks to the area of 1.2445-1.2475.
