The US Dollar failed once again near the 1.3200 resistance area against the Canadian dollar and moved down.
There USDCAD pair likely made a double top pattern near 1.3200 on the 4-hours chart, signaling a downside move.
The recent release of the US Initial Jobless Claims by the US Department of Labor posted an increase from the last revised reading of 238K to 244K.
The US Dollar looks like under pressure, and currently testing a major support area at 1.3100 vs the Canadian dollar.
Today, the Canadian Consumer Price Index (CPI) will be released for Jan 2017 by the Statistics Canada, forecast 1.6% (YoY), versus 1.5% previous.
USDCAD Technical Analysis
The US Dollar was under a lot of pressure against the Canadian dollar, and moved below 1.3150. It looks like the USDCAD pair is aligned for more losses on the back of a double top near 1.3200.The recent failure near 1.3200 was around the same resistance area, which resulted in a decline during the start of Feb 2017. The pair already traded below the 38.2% Fib retracement level of the last leg from the 1.3009 low to 1.3209 high.So, there is a risk of a breakdown in the near term. At the moment, the 1.3100 support along with the 100 simple moving average (H4) are holding the downside move. There is also a trend line support at 1.3080.So, a lot depends on the trend line and 100 SMA support at 1.3100-1.3080. A bounce is also possible if today’s Canadian CPI result fails to impress.
US Initial Jobless Claims
Yesterday, the US Initial Jobless Claims for the week ending February 18 was released by the US Department of Labor. The forecast was aligned for an increase in the number of people filing first-time claims for state unemployment insurance from 239K to 241K.The outcome was lower than the forecast, as the Claims posted an increase from the last revised reading of 238K to 244K. So, it was an increase of 6,000 from the previous week's revised level.The report mentioned that:
The previous week's level was revised down by 1,000 from 239,000 to 238,000. The 4-week moving average was 241,000, a decrease of 4,000 from the previous week's revised average. This is the lowest level for this average since July 21, 1973 when it was 239,500.
Canadian CPI
Today, the Consumer Price Index (CPI) for Jan 2017 will be released by the Statistics Canada. The forecast is slated for the CPI to increase by 1.6% in Jan 2017, compared with the same month a year ago.The monthly change is forecasted to post a rise of 0.3% in Jan 2017, better than the last -0.2%. The real outcome may impact the course of the USDCAD pair.
The recent failure near 1.3200 was around the same resistance area, which resulted in a decline during the start of Feb 2017. The pair already traded below the 38.2% Fib retracement level of the last leg from the 1.3009 low to 1.3209 high.So, there is a risk of a breakdown in the near term. At the moment, the 1.3100 support along with the 100 simple moving average (H4) are holding the downside move. There is also a trend line support at 1.3080.So, a lot depends on the trend line and 100 SMA support at 1.3100-1.3080. A bounce is also possible if today’s Canadian CPI result fails to impress.
The outcome was lower than the forecast, as the Claims posted an increase from the last revised reading of 238K to 244K. So, it was an increase of 6,000 from the previous week's revised level.The report mentioned that: