Detailed FX Market Outlook and Analysis

USD/CAD Daily Analysis 17-MAY-2023

USD/CAD Daily Analysis

The immediate trend for USD/CAD is currently balanced. The currency pair seems to be maintaining a consolidation trend within a triangle, which has its roots at 1.3976. If the rate exceeds 1.3566, an upward trajectory is expected, aiming for resistance levels at 1.3666 followed by 1.3860. On the other hand, a substantial drop below the support level of 1.3313 would counteract this perspective, suggesting a more profound correction may be in progress.

When looking at a broader timeframe, the general trend still supports the rise from the 2021 nadir of 1.2005, provided the 55-week Exponential Moving Average (EMA) at 1.3321 remains intact. There’s a continued possibility for the uptrend to pick up again and touch 1.3976 in the future. However, should the rate continually fall below both the EMA and the 38.2% retracement level of the rise from 1.2005 to 1.3976, which is at 1.3233, the chances for a bearish flip grow. In this case, a steeper drop towards the 61.8% retracement level at 1.2758 can be expected.

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