Time Zone: GMT +2
Time Frame: 4 Hours (H4)
Fundamental Analysis
The USD/CAD pair today is influenced strongly by U.S. inflation-related releases and Canadian labor-market data, both of which typically generate high volatility in USD-CAD fundamental analysis. For the USD, attention is centered on delayed PCE, Consumer Spending, Disposable Personal Income, and Michigan Consumer Sentiment & Inflation Expectations, all of which remain key components in the Federal Reserve’s inflation mandate. Higher-than-expected readings tend to strengthen the USD by boosting expectations of tighter monetary policy. On the Canadian side, Employment Change and Unemployment Rate are due, forming critical indicators of economic momentum. Strong job creation or a lower unemployment rate would likely support the CAD, adding downward pressure on the USD CAD pair during today’s session.
Price Action
The USDCAD price action on the H4 chart shows a clear descending trend, with the market producing lower highs and lower lows consistent with bearish momentum. The price is trading tightly beneath a well-respected descending trendline, confirming strong selling pressure each time price attempts to retest resistance. Currently, the pair is hovering around the 23.6% Fibonacci retracement level, which has acted as strong support and is preventing a deeper decline. Price remains trapped between the 23.6% and 38.2% Fibonacci levels, indicating consolidation inside a bearish structure, with the broader technical outlook still favoring the downside unless a significant breakout occurs.
Key Technical Indicators
Moving Averages (9 & 21 EMA): The 9-EMA is below the 21-EMA, both sloping downward and confirming strong bearish momentum. Price continues to reject these EMAs as dynamic resistance, reinforcing the descending trend.
RSI (28): RSI at 41.11 reflects moderate bearish momentum without entering oversold territory. The indicator supports continuation of the downtrend unless a divergence emerges.
Stochastic (5,3,3): Stochastic near 53–55 sits in neutral territory, indicating a short-term pause in momentum. No overbought or oversold signals are present, allowing the downtrend to remain intact.
Support and Resistance
Support: The nearest strong support lies at the 23.6% Fibonacci retracement zone, which has repeatedly halted bearish extensions.
Resistance: The closest resistance is the descending trendline combined with the 38.2% Fibonacci level, which has repeatedly capped bullish retracements.
Conclusion and Consideration
The USD-CAD H4 technical and fundamental forecast currently supports a bearish continuation, driven by the downward EMA structure, trendline resistance, and price trading within a weakening consolidation zone. Today’s fundamental releases from both the U.S. and Canada may generate increased volatility and potential breakout conditions. Traders should monitor the 23.6% Fibonacci support closely, as a breakdown could accelerate downside continuation, while a reclaim of 38.2% may trigger a corrective rally. As always, apply disciplined risk management when trading major economic releases.
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.
