The US Dollar (USD) inched lower against the Canadian Dollar (CAD) on Wednesday, decreasing the price of USDCAD to less than 1.3400. The price decreases after a major economic release. The technical bias might turn bullish because the pair’s price printed a higher low in the last downside move.
USD/CAD Technical Analysis
As of this writing, the pair is being traded around 1.3316. A major horizontal support may come across at 1.3290 ahead of 1.3229, the confluence of a trend line and horizontal support level which may act as strong support preventing the price from falling below this level. Another support may also hit the price at 1.3144, the 23.6% Fib level as shown in the graph below.
On the upside, the 61.8% Fib level resistance is likely to put a stop on the price around 1.3354 ahead of 1.3500, the psychological number and then comes a key resistance level 1.3564, the high of May 31, 2019, as demonstrated in the graph above. The technical bias shall remain bullish as long as 1.3290, the major horizontal support level remains in place.
Canada’s International Merchandise Trade
Statistics Canada has recently released a figure concerning International Merchandise Trade. The figure represents the differential value between the level of exports and imports of the goods being manufactured in Canada excluding non-tangibles such as services.
It is considered a key indicator of the growth of the country’s economy since it reflects a true picture with respect to the GDP. If a constant demand for Canadian products is seen then this leads to a growth in the balance of trade positively suggesting a bullish market for the Canadian Dollar (CAD) and vice versa.
While taking into account the price behavior of the pair over the last couple of days, selling USDCAD around current levels may be a wise decision in a short to medium term. On the other hand, a long term position may give a positive outcome.
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