USDCAD rose quickly above the tight bearish channel, but soon stopped around February's lows and near its 20-day SMA on Thursday.
The pair is set to close the month down by 2.3%, marking its worst monthly performance since 2021. That said, the recent bullish channel breakout continues to look promising as both the RSI and MACD are showing a convincing improvement, indicating an encouraging start to July.
If the 20-day SMA at 1.3270 gives way, the price may advance straight to the broken, almost- flat support trendline from November 2022 seen at 1.3350. The 50% Fibonacci retracement of the 1.4667-1.2006 downtrend is adding extra importance to this region. Therefore, a successful move higher and above the nearby resistance of 1.3380 might add extra impetus to the price, bringing the 50-day SMA at 1.3420 next into view. Should the latter prove fragile, the recovery could pick up steam towards the 200-day SMA at 1.3500.
Alternatively, the price could slide to retest Thursday’s low of 1.3235. A continuation lower could examine the 1.3190 constraining zone ahead of June’s floor of 1.3145. Another failure here might threaten a downtrend extension towards the 1.3055-1.3000 zone, which encapsulates two key ascending trendlines from the 2021 lows and the 38.2% Fibonacci level.
In brief, USDCAD is expected to preserve its recovery mood, but traders might wisely wait for a close above the 20-day MA before they drive the pair higher.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades near 1.0400 following the earlier recovery attempt. The holiday mood kicked in, keeping action limited across the FX board, while a cautious risk mood helped the US Dollar hold its ground and forced the pair to stretch lower.
GBP/USD approaches 1.2500 on renewed USD strength
GBP/USD loses its traction and trades near 1.2500 in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as trading conditions remain thin heading into the Christmas holiday.
Gold hovers around $2,610 in quiet pre-holiday trading
Gold struggles to build on Friday's gains and trades modestly lower on the day near $2,620. The benchmark 10-year US Treasury bond yield edges slightly higher above 4.5%, making it difficult for XAU/USD to gather bullish momentum.
Bitcoin fails to recover as Metaplanet buys the dip
Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.