Time Zone: GMT +3
Time Frame: 4 Hours (H4)
Fundamental Analysis:
The USD-CAD pair is sensitive today due to several significant news releases. USD traders are attentive to the upcoming Non-Farm Payrolls, Unemployment Rate, Employment Cost Index, and Consumer Credit data, critical indicators affecting inflation and employment health. Positive labor market figures and increased consumer credit could strengthen the USD, potentially pushing USDCAD upwards. CAD traders are waiting for employment figures from Canada, releasing on July 11, which might keep today’s movements influenced by USD dynamics primarily.
Price Action:
The USDCAD H4 chart shows a clear downtrend, recently testing its support level and moving upwards to retest its descending trendline resistance. The price could face significant resistance here; breaking above this trendline would indicate potential initiation of a new upward trend. Traders must remain cautious and await confirmation of a break above the resistance line to establish any bullish position.
Key Technical Indicators:
Parabolic SAR: The indicator dots are currently above the price, suggesting bearish momentum. Traders should wait for the dots to shift below price levels, signaling a potential reversal towards a bullish bias.
RSI: Currently at 38.51, the RSI indicates a mildly bearish sentiment. However, it’s not yet oversold, allowing for potential downward continuation or eventual upward momentum if a reversal is signaled by price action.
MACD: The MACD histogram is slightly negative, indicating current bearish momentum. Traders should monitor closely for a crossover of the MACD line above the signal line to identify a possible bullish reversal.
Stochastic Oscillator: Currently at 75.03, showing a potentially overbought condition. This suggests caution, as the price could face downward pressure in the short term unless bullish momentum intensifies significantly to confirm an upward breakout.
Support and Resistance:
Support: Immediate support is found at 1.3627, a crucial level that recently stopped the price’s downward momentum.
Resistance: Immediate resistance stands at the descending trendline, currently around 1.3700, which is critical for potential trend reversal confirmation.
Conclusion and Consideration:
The USD/CAD H4 remains bearish but faces a critical test at its descending trendline resistance. Technical indicators suggest caution, with the potential for a trend reversal pending confirmation. Fundamental news releases today significantly influence USD strength, warranting close monitoring. Traders should wait for clear breakout confirmations before entering positions.
Disclaimer: The analysis provided for USD/CAD is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on USDCAD. Market conditions can change quickly, so staying informed with the latest data is essential.
