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FxWirePro:USD/CAD resumes downside after failing to break above 1.3438

  • The USD/CAD pair continued its decline on Wednesday as the Canadian dollar gained strengthened against its broadly stronger U.S. counterpart as prices of oil, one of Canada's major exports, rose for the second straight day.
     
  • Despite an increase in U.S. crude inventories, oil added to gains, benefiting from Libyan supply disruptions and expectations that an output cut led by the Organization of Petroleum Exporting Countries would be extended.
     
  • U.S. crude futures surged to nearly a two-week high after the Energy Information Administration (EIA) reported that crude inventories rose 867,000 barrels last week, nearly half the build expected, as refineries ramped up processing after seasonal maintenance and imports dropped and exports rose.
     
  • The ongoing weakness is set to continue for this pair as the resistance level at 1.3438 is likely to act as strong barrier to the bulls and bring a further decline towards lower levels.
     
  • The immediate support can be seen at 1.3337, break below this level will expose the pair to next support level at 1.3273.
     
  • Major resistance can be seen at 1.3438, break above this level will expose it towards 1.3500 levels.

    Resistance Levels

    R1: 1.3387 (50% Retracement level)

    R2: 1.3438 (61.8% Retracement level)    

    R3: 1.3500 (Psychological levels)

    Support Levels

    S1: 1.3337 (38.2% Retracement level)    

    S2: 1.3273 (23.6% Retracement level)    

    S3: 1.3218(Jan 23rd lows)
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