Choose your trading platfom

Chart of the week – Bearish signals sighted in USD/CAD ahead of BoC meeting


Chart of the week – USD/CAD

Bearish signals sighted in USD/CAD ahead of BoC meeting

Short-term technical analysis (1 to 3 weeks)

(click to enlarge chart)

Time-stamped: 9 Jul 2022 at 3:00pm SGT

Source: CMC Markets

  • Bank of Canada will meet this Wednesday, 13 July to decide on its monetary policy outcome.
  • From an integrated technical analysis perspective, the +560 pips rally seen on USD/CAD from its 8 June 2022 low of 1.2518 may have reached an exhaustion/inflection point on 5 July 2022 where the next potential trajectory for USD/CAD is likely skewed towards the downside in the short-term.
  • Watch the 1.3080 key medium-term pivotal resistance for a potential drop to retest its intermediate support at 1.2840 and a break below it may see a further downside acceleration towards the next support at 1.2680/2650 (former minor swing high of 13 April 2022 & a cluster of Fibonacci retracement/extension levels) in the first step.
  • However, a 4-hour close above 1.3080 invalidates the bearish scenario and triggers a bullish breakout above the upper boundary of its one-year ascending range configuration for a further up move towards the next resistance at 1.3340 (also the 50% Fibonacci retracement of prior major downtrend phase from 19 March 2020 high to 1 June 2021 low).
  • Negative elements; it has formed a daily “Evening Doji Star” bearish reversal candlestick pattern (taking into account the price actions of 5/6/7 July 2022) right at the 1.3080 ascending range resistance, short-term downside momentum remains intact as the 4-hour RSI has just staged a bearish breakdown from its corresponding ascending support at the 50% level and still has not reached an extremely oversold level.

Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.