Are we about to see some Fourth of July fireworks from this dollar pair soon?
Check out these USD/CAD levels I’m watching.
As you can see from the 4-hour chart below, the pair recently tumbled below the floor around the 1.3350 minor psychological mark.
Now price is in correction mode after pulling up from the 1.3120 lows and might find more sellers at this area of interest.
USD/CAD: 4-hour
USD/CAD 4-hour Forex Chart by TV
Using the handy-dandy Fibonacci retracement tool on the latest downswing shows that the 38.2% level is right around the former support.
A larger pullback could reach the 50% level that coincides with the 200 SMA dynamic inflection point.
The 100 SMA is below this slower-moving SMA, suggesting that resistance levels are more likely to hold than to break. Also, the gap between the indicators is widening to reflect strengthening selling pressure.In that case, USD/CAD could make its way back down to the lows pretty soon. The 100 SMA even appears to be holding as dynamic resistance at the moment!
At the same time, Stochastic is on the move down to confirm that bearish momentum is in play. The oscillator has plenty of ground to cover before reaching the oversold region to indicate that sellers are tired.
Of course a bunch of top-tier catalysts from the U.S. and Canada are worth keeping tabs on when trading this week. Did I mention we’ve got jobs reports from both economies, as well as the FOMC minutes, lined up?