The USD/CAD price analysis shows that selling pressure is rising at 1.2780s with bears eye on breaking below the 100-DMA Details
Posted Sunday, May 29, 2022 2:55 (AM) by- Kevin Smith
The USD/CAD price analysis shows that selling pressure is rising at 1.2780s with bears eye on breaking below the 100-DMA

The USD/CAD price analysis shows that selling pressure is rising at 1.2780s with bears eye on breaking below the 100-DMA

  • Canadian dollar has been recording positive gains over the past week, averaging 0.85 percent.    
  • Positive market sentiment increased the demand for high-beta currencies like the Canadian dollar.
  • The USD/CAD price forecast is to see solid support between 1.2694-1.2700.

The USD/CAD trend lower during this North American session, extending its losses over the third week in a row in the wake of the "aggressive" US Federal Reserve and its "aggressive" policy. Core PCE rose to 4.9 percent, but dipped to 5.1 percent Year-on-Year. As of at the moment of this writing USD/CAD is trading at 1.2727. USD/CAD trades at 1.2727.

US equities remain positive, reflecting a risk-on mood. The S&P 500 is poised to erase its losses from May according to they have informed the US Commerce Department informed that inflation was rising at a slower pace than March. Is the Fed reduce the rate of increasing rates after crossing the threshold of 2?

While inflation is trending lower, ING analysts noted that there are some issues in the economy. First, the geopolitical environment continues to push energy prices up. In addition, China's zero-covid strategy has slowed the progress of the supply chain. And thirdly the labor market's tightness must be able to stop a wage spiral.

The USD/CAD on Friday started trading close to the highs of the day at 1.2784 however, it sank to three-week lows in the 1.2720 zone.

The USD/CAD Forecast Price: A Technical Outlook

USD/CAD is still a bit upward-leaning even though its downtrend of two weeks will be able to hold a solid support zone in the 50 and 100 day Moving averages (DMAs) which is around the 1.2704-1.2693 zone. However, bulls in USD/CAD need to be aware and not be too confident that the mentioned level will remain. Why? Why is that the Relative Strength Index (RSI) at 44.29 is trying to lower in the bearish zone and has enough room before it reaches oversold levels.

If the USD/CAD downtrend of two weeks continues, the first major support could be the 1.2693-1.2704 zone. If it breaks below, it will reveal that the 200-DMA is 1.2658 which would be followed by the low on April 22 at 1.2566. On the other hand the first resistance for USD/CAD is 1.2800. If cleared, the next supply zone is the 20-DMA between 2862-2862. Then, the high of March 8 at.1.2901.


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