USD CAD rebounded last week and gained over 100+ pips and is currently supported by the 50 DMA followed by the 50% fib at 1.3332. USD will be led into a consolidation period before picking up again. We are just few weeks away from Trump's presidency and this could mean that we will have more rate hikes this year and USD will reach new heights. But for now, we are more focused on three Key events scheduled for Friday starting from CAD-Employment change, Trade balance and unemployment Rate, this will be the prime market movers for USD/CAD. We will wait for the pair to decline towards the 50% Fib or the lower ascending channel to go long again.
Price for the last day of the year was rejected at the same level as the previous high doji that is below the descending trend line. The last daily candle shows that there will be more decline in the coming days and could be large. The immediate support is at 1.0363 and a break below this level will reach to new lows for the year. RSI also shows a similar reversal and affirms this analysis.
The next target is 0.9856, about 500 pips from the current level and this is what we will be looking at.
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