Can USD/CAD Break the 1.3028 Trendline Support?

The US Dollar (USD) inched lower against the Canadian Dollar (CAD) on Friday, decreasing the price of USDCAD to less than 1.3100 ahead of the Canada’s Consumer Price Index (CPI) news. The technical bias remains bearish because of a lower low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 1.3099. A support may be noted around 1.3028, the confluence of a couple of trendline support zones as demonstrated in the given below daily chart. A break below the 1.3028 support shall incite renewed selling pressure, validating a move towards the 1.2950 support.

Can USD/CAD Break the 1.3028 Trendline Support?

On the upside, the pair is likely to face a hurdle around 1.3169, the intraday high of yesterday ahead of 1.3180, the trendline resistance area and then 1.3283, the 50% fib level. The technical bias shall remain bearish as long as the 1.3209 resistance area is intact.

Canada’s CPI Release

Statistics Canada is due to release the Canada’s Consumer Price Index (CPI) data today. According to the average forecast of different economists, the CPI – a main gauge for inflation- remained 1.6% in January as compared to 1.5% in the same month of the year before. Generally speaking, a higher CPI reading is considered bullish for the Canadian Dollar and vice versa.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good strategy if the data comes better than forecast.'
Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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