USD/CAD Challenges Daily SMA
It appears that the sideways action in the USD/CAD is going to continue for at least one more day. The forex session has been a tight one, featuring consolidation across the majors. The Loonie is no exception, turning in a modest 65 pip trading range.
Last Friday’s dull action in the USD/CAD has certainly continued today. However, the weekly crude oil inventory cycle kicking off Tuesday afternoon is sure to bring some action to this market. Aside from the API and EIA oil stocks reports, Wednesday features release of the Retail Sales (Nov.) reports from Statistics Canada. The figures are expected to slump on a monthly (-0.6%) and yearly (-0.4%) basis, but there is room to outperform the somewhat depressed expectations.
USD/CAD: Technical Outlook
Earlier, the Loonie posted a hard test of the Daily SMA at 1.3302. Since that time, rates have fallen, trading in the vicinity of 1.3275.
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The pronounced “L” formation on the daily chart is a strong signal of market consolidation. Regardless, nothing lasts forever, with the coming oil inventories reports and Retail Sales ready to shake this pair out of its slumber. Here are the key levels to watch for coming sessions:
- Resistance(1): Daily SMA, 1.3302
- Resistance(2): 38% Current Wave Retracement, 1.3363
- Support(1): Double Bottom Pattern, 1.3180-83
Overview: With a bit of luck, this market will breakout in the next 48 hours. In the event that it does, a sell from the 38% Current Wave retracement (as recommended last week), or a buy from the daily Double Bottom (1.3180-83) are great ways to get in on the action.
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