CAD may witness a temporary decline 1/6/2023

The Canadian dollar provided positive trades until the middle of the American session, approaching by a few pips from the first target to be touched at 1.3660, recording its highest level at 1.3651.

Technically, we find that the pair’s movements returned to decline quickly as a result of approaching the resistance above. With a closer look at the 240-minute chart, we find the 50-day simple moving average began to pressure the price from above, and this coincides with breaking the support of the ascending price channel at The price is 1.3610.

We may witness a bearish tendency in the coming hours, provided that we witness a break of 1.3550, targeting 1.3535, and 1.3500 as a waiting station. Therefore, we must pay close attention and monitor the price behavior of the pair around 1.3500, due to its importance to the general trend in the short term, and breaking it will put the pair under strong negative pressure, targeting 1.3440.

From above, the upward breach, and the price’s consolidation above 1.3625, invalidates the activation of the suggested scenario, and the pair returns to the official bullish path, towards 1.3685 & 1.3720.

Note: Today, we are awaiting high-impact economic data issued by the US economy, “the change in private sector jobs,” and the “manufacturing purchasing managers” index, in addition to the report issued by the International Energy Agency regarding oil inventories and we may witness high volatility in prices at the time of the news release.

Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.

S1: 1.3535	R1: 1.3625
S2: 1.3500	R2: 1.3685
S3: 1.3440	R3: 1.3720