USD/CAD Consolidates
In the second half of April, the USD/CAD chart has shown a decline in volatility following significant spikes observed since February.
The Canadian dollar has stabilised against the US dollar within the 1.3901.380 range over the past week, as market participants assess what a fair USD/CAD rate might be, given the evolving news backdrop:
The US dollar gained upward momentum on hopes of easing trade tensions between the US and China, although the information remains conflicting Trump claims negotiations are ongoing, while Beijing denies this.
Oil prices a key Canadian export have recovered by more than 10% from their April lows, providing support for the Canadian dollar.
Economic data published this week suggests a cooling in the Canadian economy: employment is declining, and the pace of average wage growth has slowed to 5.4%.
Although an important political event the Canadian Parliamentary elections is set to take place this weekend, it appears to have had little impact on the USD/CAD exchange rate so far. Trade tariffs between the US and Canada likely remain the dominant concern.
Technical Analysis of the USD/CAD Chart
Price fluctuations have formed a descending channel that originated in March.
From a bearish perspective, resistance may be encountered at:
the median line of the channel;
the psychological level of 1.400.
From a bullish perspective:
the price has formed a rounding bottom pattern near the 1.380 level;
the lower boundary of the channel is acting as significant support.
It is possible that the weekend will bring key developments that could act as catalysts, breaking the established range between 1.390 and 1.380.
Read more: https://fxopen.com/blog/en/oa-usd-cad-consolidates/
Text source: Forex Trading Blog
