USD/CAD: pullback of the 5-month old resistance line as WTI slowed down

On Friday, May 31, Statistics Canada reported that “Real gross domestic product (GDP) grew by 0.1% in the first quarter, compared with the fourth quarter of 2018,” which is less than predicted. The annualized rate rose to 0.4%, but did not meet the analysts’ estimate of 0.7%.

On Monday, the pullback of the USD / CAD pair to the value of 1.3510 is caused by a decrease in the dynamics of decline in WTI and the weakness of the US dollar relative to other currencies. It is necessary to monitor the production of PMI in order to catch the fresh momentum in the market.

USD/CAD Technical Analysis 03rd June 2019

The US Dollar traded towards the 1.3560 level against the Canadian Dollar before starting a downside correction. The USD/CAD pair declined below the 1.3520 support level to move into a bearish zone.

There was a break below a major bullish trend line with support at 1.3518 on the hourly chart. Besides, there was a close below the 1.3520 support and the 50 hourly simple moving average. The pair even spiked below the 1.3500 level and traded as low as 1.3491.

If there is an upside correction, the recent support near the 1.3520 level and the 50 hourly SMA is likely to act as a resistance.

Moreover, the 50% Fib retracement level of the recent decline from the 1.3564 high to 1.3491 low is also near the 1.3520 level. On the downside, a break below the 1.3490 level might push the pair towards 1.3460.

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