Over the past three days, USDCAD has been stuck in a sideways movement, exhibiting limited volatility. However, during today's Asian trading session, USDCAD managed to break above the recent swing high, indicating a potential shift in market sentiment.
Today, all eyes are on the release of the Canadian Core CPI, a high-impact economic indicator. Economists are optimistic, forecasting a 0.4% increase compared to the previous -0.3%. Despite this positive outlook, the upbeat forecast may not necessarily translate into strength for the Canadian dollar against the US dollar.
A key resistance level to monitor is 1.3530, which previously saw a failed double bottom formation. This level holds significance as a potential point of interest for resistance. If the economic news release exceeds expectations, this level could serve as a strong resistance point for shorting the USD against the CAD.
Given the current sideways movement in the market, it may not be prudent to heavily rely on technical indicators such as EMAs and oscillators like MACD and RSI. However, traders should be prepared to reassess their strategy if prices either break below the ascending trendline or above the key resistance level.
1. Sideways movement observed in USDCAD over the last three days, with a recent break above the swing high.
2. High-impact Canadian Core CPI release expected today, with economists forecasting a positive outcome. However, this may not immediately strengthen the CAD against the USD.
3. Key resistance at 1.3530, marked by a failed double bottom formation, could act as a significant resistance level if economic news exceeds expectations.
4. With the market in a sideways phase, reliance on technical indicators should be cautious unless significant price movements occur.
5. Stay vigilant for potential breakout opportunities if prices breach the ascending trendline or key resistance level.
Forecast 0.4% vs Previous -0.3%
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