The main highlights
- USD / CAD started a big fall from well over 1.4000.
- There was a break below a larger bullish trend line of 1.3780 on the daily chart.
- US ADP employment is likely to fall by 9,000,000 in May 2020, less than the last -20.236K.
- The BoC interest rate decision is announced today (Forecast – no change from 0.25%).
USD / CAD Technical Analysis
After forming a major peak near the 1.4667 level in March 2020, the US dollar started a significant fall against the Canadian dollar. USD / CAD broke many supports near 1.4000 to move into a bearish zone.
Looking at the daily chart, the couple failed to keep above the 1.4000 and 1.3850 support levels. It broke the 50% Fib retracement level for the most important upward movement from 1.2951-made (formed in December 2019) to 1.4667 high (formed in March 2020).
More importantly, there was a break below a larger bullish trend line of 1.3780 on the same chart. The pair is now trading well below the 1.3700 level and the 100-day simple moving average (red).
On the downside, there are a few key supports near the 1.3400 level and the 200-day simple moving average (green). The 76.4% Fib retracement level for the key upward move from the lowest 1.2951 to the high 1.4667 is also close to 1.3355.
Zone 1.3350-1.3400 represents the previous breakout area. Therefore, 1.3350 may provide support. Any additional losses could lead to USD / CAD against 1.3000 support.
On the opposite side, the previous support near the 1.3700 and 100-day SMA may act as barriers. To move into a positive zone, the pair must climb above 1.3700 and sit nicely above 1.3800.
Looking at EUR / USD, the pair expanded its increase to over 1.1150. Similarly, the GBP / USD pace over the resistance zone increased 1.2500.
Upcoming financial announcements
- Germany’s unemployment change for May 2020 – Forecast 200K against 373K earlier.
- Germany’s unemployment rate for May 2020 – Forecast 6.2% versus 5.8% earlier.
- Germany’s PMI for services for May 2020 – Forecast 31.4 against 31.4 earlier.
- Eurozone Services PMI for May 2020 – Forecast 28.7, against 28.7 previously.
- UKI’s services PMI for May 2020 – Forecast 28.0, against 27.8 previously.
- US Services PMI for May 2020 – Forecast 36.9, up from 36.9 previously.
- US ADP Employment Change May 2020 – Forecast -9000K, versus -20236K earlier.
- United States ISM Non-Manufacturing Index for May 2020 – Forecast 44.0, up from 41.8 previously
- BoC interest rate decision – Forecast 0.25% versus 0.25% earlier.