USD/CAD Retests Double Top – All Eyes on Bullish Breakout!
Arslan Butt • 2 min read
Fellas, the USD/CAD closed at 1.36036, after placing a high of 1.36095 and a low of 1.35246. Overall the movement of the USD/CAD pair remained bullish throughout the day. After posting losses for three consecutive days, the USD/CAD pair rose on Tuesday, reversing its direction on the strong US dollar. The bullish move came in, despite better-than-expected Ivey PMI data from Canada.
At 19:00 GMT, the Ivey PMI from Canada surged to 58.2 for the month of June, compared to the 50.2 that was forecast, indicating an expansion of manufacturing activities, which lent support to the Canadian dollar, thereby limiting gains for the USD/CAD pair. Meanwhile, from the US, at 18:59 GMT, the IBD/TIPP Economic Optimism decreased to 44.0 for June, from the projected 48.2, weighing on the US dollar. At 19:00 GMT, the JOLTS Job Openings rose to 5.40M from the expected 4.70M in May, supporting the US dollar, and ultimately taking the USD/CAD prices higher.
On the WTI Crude Oil front, the fuel prices also supported the commodity-linked Loonie on Tuesday, by posting 0.50% gains and reaching the $41 level. However, CAD traders ignored this, and the USD/CAD pair kept moving upward. The upward trend of the USD/CAD pair could be attributed to the rise in global equities on Tuesday, after Chinese stocks surged to the highest levels, with a rise of 5.7%. The state-owned journal encouraged traders to invest in Chinese stocks, as it was the best time, in view of the prospects of a healthy bull market. This raised the US dollar across the board, due to a surge in global equities, pushing the USD/CAD pair.
Daily Technical Levels
Pivot point: 1.3541
The day before, the USD/CAD violated the descending triangle pattern at the 1.3550 level, which has led the exchange rate towards the next resistance level of 1.3610. A continued bullish trend could trigger more buying, until the 1.3660 level, while support is likely to remain within the 1.3480 range. The RSI and MACD support buying trends, so we took a bullish trade, targeting 1.3598. Good luck!