USD/CAD tried to extend upward movement on Monday, but dragged from 1.1225 down to the 1.1220 level. 1.1210 remains the key support, the psychological number and 23.6% fib level. On breaching this support, a bearish breakout will be seen. However, the overall bias is bullish because of the Higher Low on the daily chart.
On the upside, an immediate resistance lies around 1.1224, as demonstrated by the trend line in the following chart. Breaking this resistance will invalidate the bearish breakout that can spur a renewed buying interest confirming a new upside rally towards the next resistance that can be seen around 1.1297, the high of the previous week.
On the downside, a support can be seen around 1.1097, the 38.2% fib level, ahead of 1.1070, the 50-day SMA. The bias will remain bullish unless the price succeeds in breaching the support around 1.1184.
Markit Services PMI
The USD Markit Services PMI remains at 58.0 points this October, according to the average forecast of different economists. In comparison, the growth of services sector was recorded at 58.9 points, the month before. Generally speaking, a higher reading is considered bullish for the US Dollar (USD).
Pending Home Sales
The USD pending homes sales are also due to release by National Association of Realtors later in the day during the US session. The residential housing contract activity in the US is expected to increase by 0.5% this October. Generally speaking, a higher reading is considered positive for the USD and vice versa.
Trading Strategy
Considering the overall fundamental and technical analysis, going long is appropriate in short to medium term only if the daily candle closes above 1.1241.
Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
