USD/CAD is falling, but is a short-term reversal likely?
The Canadian dollar started the week higher in the forex market, pushing the USD/CAD pair south extending last week’s losses.
USD/CAD fell to a two-month low last Thursday but closed higher on Friday despite disappointing US retail sales data and a surge in oil prices.
The price of oil rose 6.5% last week and rose again today amid concerns about the ability of OPEC+ countries to meet higher production targets.
However, the situation of the Omicron variant in Canada, which is quite serious, with stricter restrictions imposed, could hurt the demand for the Canadian dollar in forex.
With the United States closed for a holiday. The oil price and Canadian manufacturing data should be the main driver for USD/CAD today.
What’s next in forex for the USD/CAD pair?
USD/CAD extended its decline from 1.2963 reached in late December, finding support at the multi-month uptrend line at 1.2460 last week, just below the 200-day moving average.
The price has retraced the SMA-200 moving average which, combined with the hammer candlestick pattern and a declining bearish bias on the MACD, suggests that a move higher in the FX market could be conceivable in the short/medium term.
USD/CAD daily chart
Buyers could look for a move above 1.26, the high from early November, to point to further gains towards the 50-day moving average at 1.27.
Sellers could look for a move below the 200-day moving average at 1.2490 and 1.2460, last week’s low, to take further losses towards the Nov 10 low at 1.24.
By Fiona Cincotta, Forex.com » Official site
Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation to buy or sell foreign exchange contracts or CFDs. . Although the information contained in this document has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no responsibility for any direct, indirect, or consequential damages that may result from anyone’s reliance on such information. information.
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