USD/CAD is testing a key resistance zone ahead of the FOMC meeting minutes!
Will we see a breakout today?
Or will the pair extend its downtrend?
USD/CAD 15-min Forex Chart by TV
I don’t know if you noticed but USD/CAD has been showing lower highs and lower lows since late June when USD/CAD hit resistance at the 1.3280 area.
The pair even hit the 1.3200 psychological level before finding buyers!
USD/CAD is now trading near 1.3240, which lines up with a descending channel resistance AND the 61.8% Fibonacci retracement of July’s downswing.
It also doesn’t hurt that USD/CAD’s current levels are not too far from the R1 (1.3250) Pivot Point level and the 200 SMA on the 15-minute time frame.
Last but not least, USD/CAD has already risen by around 30 pips today, which is around half of USD/CAD’s daily average volatility.
Can USD/CAD extend its downtrend?
The long wicks around 1.3250 suggest that there are still enough sellers preventing further gains for the U.S. dollar, at least for now.
Today’s FOMC meeting minutes report may change the tides for the Greenback…or not.
Unless we see fresh insight in the Fed’s release, then it’s more likely that the resilience of commodity-related currencies against USD and the overall risk-taking mood in the FX market would persist today.
USD/CAD could dip towards the 1.3230 Pivot Point line and 100 SMA or even make its way back down to its July lows.
What do you think?
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