US Dollar versus Canadian dollar took a strong support from exponential moving averages 50 and 200 in daily - providing an upthrust to the pair with strong hawkish sentiments that pushed the pair towards 1.29000 price action. This bullish maneuver was followed by a bearish pullback and a closing below 38.2% fibb retracement level i.e 1.2854. The head and shoulder pattern formed on the daily chart with its neckline at 1.29000 is indicating that USDCAD is up for a bearish move move again. On the weekly time frame, the pair failed to break above the exponential moving average 200 - followed by a dovish stance from exponential moving average 50 on the monthly chart, providing a shoulder resistance to the weekly technicals side by side. The price action appears to be contouring a bullish inverted head-and-shoulders pattern where any USD decline is merely filling the rungs of its right shoulder. Eventually, as major support levels hold up, USD/CAD would still revert higher in the medium-term.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

WTI oil prices locked gains as experts pointed to signs of tightening US oil supplies. ANZ analyst said, global utilities are switching to fuel oil due to rising gas and coal prices. Furthermore, reduced output from the Gulf of Mexico after Hurricane Ada implied lesser supply in near term.

There are hints from the technical indicators that the USD rally requires a pause before it finds fresh oxygen to continue its rally higher. Noticeably, the pair is close to the 38.2% Fibonacci retracement of the range drop from 1.4668 to 1.2007 at 1.3024; and a clear resistance confluence hosted by 100 and 200-week moving averages at 1.3046 and 1.3067, respectively. Last week’s sustained strength beyond the 1.2700 round figure marked a bullish breakout through a one-week-old trading range. A convincing break below might turn the pair vulnerable to accelerate the slide back towards the 1.2625 intermediate support en-route the 1.2600 mark.

USDCAD

Sep 21 2021

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