USD/CAD Rate Reaches Significant Support Level

On June 12, we wrote about bearish signs observed on the USD/CAD chart, pointing to the prospect of USD weakening.

Since then, the USD/CAD rate has decreased by approximately 0.75% and has reached an important support level, specifically the lower boundary of the descending triangle (with the median around 1.36700), which indicates a long-term balance of supply and demand among market participants.

The fact that today the USD/CAD rate is rising from yesterday's minimum on June 4 at the level of 1.36408 confirms the importance of the support formed by the lower boundary of the triangle.

According to today's technical analysis of the USD/CAD chart:
→ the price in the second half of June is moving within a downtrend (shown by the red channel);
→ the price has dropped into the lower half of the red channel, indicating bearish preference;
→ bulls attempted to push the price upward in mid-June, breaking through the upper boundary of the triangle, but failed – a bearish sign.

Could the lower boundary be breached? Certainly, if there are fundamental drivers for it.

Such drivers could be the Canadian inflation news – they are set to be released today at 15:30 GMT+3.

According to ForexFactory, it is expected that the CPI index will decrease on a monthly basis and will be 0.3% (compared to 0.5% a month ago).

Be prepared for volatility spikes tonight.

Read analytical USD/CAD price forecasts for 2024 and beyond.