USD/CAD Faces Tough Resistance Near 1.3400
The US Dollar (USD) fell against the Canadian Dollar (CAD) on Wednesday, decreasing the price of USD/CAD to less than 1.3425 after the Canada’s Ivey Purchasing Managers Index (PMI) news release. The technical bias remains bullish because of a higher high in the recent upside move.
Technical Analysis
As of this writing, the pair is being traded around 1.3410. A support may be seen near 1.3282, the 50% fib level support area as demonstrated in the given below daily chart. A break and daily closing below the 1.3282 support shall incite renewed selling interest, validating a move towards the 1.3067 support zone which is another critical support zone.
On the upside, the pair is expected to face a hurdle near 1.3429, the trendline resistance area as marked with brown color in the above chart. A break and daily closing above the 1.3429 resistance shall trigger fresh buying pressure, opening door for a move towards the 1.3600 resistance, the high of 28th December, 2016 as marked with red color in our chart. The technical bias shall remain bearish as long as the 1.3600 resistance zone is intact.
Canada’s Ivey PMI News
The pace of purchasing activity in Canada slowed in February, driven by a decline in prices paid by companies for materials, according to Ivey Purchasing Managers Index data released on Tuesday.
The seasonally adjusted index fell to 55.0 from 57.2 in January, though the unadjusted index rose to 55.1 from 52.3. A reading above 50 indicates an increase in the pace of activity.
On an adjusted basis, the measure of prices tumbled to 61.1 from 70.1, pointing to some relief for companies from a recent rise in commodity prices. Supplier deliveries also contracted further, falling to 45.9 from 46.6.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.