The USD / CAD pair is locked in a rectangular technical pattern. From July 17 to today, the pair has got stuck inside this pattern for more than 10 days, oscillating inside the borders in regular moves. The lateral movement of the Canadian dollar is projected from the low of 1.2525 towards the high of 1.2602.
The key level of 1.2600 acts as immediate resistance and the top of the technical pattern. A sharp break above this zone would enable the upward move towards the 8/8 murray resistance zone at 1.2695.
The SMA of 21 located at 1.2570 is the pivot point for the USD / CAD pair. If it consolidates above this level, the Canadian dollar could weaken and break the 1.2602 area.
The risk aversion is still benefiting the US dollar as a safe haven, which was also supported by a good recovery in US Treasury yields. This would put the strength of the Canadian dollar at risk. If USD/CAD breaks the 1.26 zone, it can continue its upward movement to the 1.28 area in the medium term.
On the contrary, if the US FED's verdict is not favorable for the American currency, the Canadian dollar could break the bottom of the rectangle pattern around 1.2525 and could fall towards the support of 6/8 of Murray and the zone of EMA 200.
Meanwhile, the eagle indicator is showing a bullish signal on a 4-hour chart. Therefore, any subsequent decline could be considered a buying opportunity. A technical bounce around the 200 EMA located at 1.2450 will be a good opportunity to buy.
Support and Resistance Levels for July 28 - 29, 2021
Resistance (3) 1.2687
Resistance (2) 1.2645
Resistance (1) 1.2620
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Support (1) 1.2554
Support (2) 1.2512
Support (3) 1.2453
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Trading tip for USD/CAD for July 28 - 29, 2021
Buy above SMA 21 at 1.2585, with take profit at 1.2695 (8/8), stop loss below 1.2550.
Sell below 1.2555 (SMA 21), with take profit at 1.2525 and .2451 (6/8), stop loss above 1.2590.
The material has been provided by InstaForex Company - www.instaforex.com