Detailed FX Market Outlook and Analysis

USD/CAD Daily Analysis 12-MAY-2023

USD/CAD Daily Analysis

The intraday bias for USD/CAD has turned bullish once again, as indicated by a strong break of the 55 4-hour Exponential Moving Average (EMA). This breakthrough suggests that the currency pair is likely to continue rising towards the resistance level at 1.3666. However, if there is a significant decline and a firm break below 1.3299, it would extend the ongoing corrective pattern from 1.3976, pushing the pair lower towards the 100% projection level of 1.3395, which is calculated based on the range from 1.3976 to 1.3224, starting from 1.3860.

Looking at the bigger picture, the overall trend remains favorable for an upward movement as long as the 55-week EMA (currently located at 1.3315) holds. This trend originates from the low point of 1.2005 in 2021 and is expected to resume its ascent towards 1.3976 in the future. However, if there is sustained trading below both the EMA and the 38.2% retracement level of 1.2005 to 1.3976 at 1.3233, it would increase the likelihood of a bearish reversal. In such a scenario, a deeper decline towards the 61.8% retracement level at 1.2758 would be the next target.

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