Forex Trading: USDCAD Technical Analysis – October 19, 2018

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The US Dollar (USD) inched lower against the Canadian Dollar (CAD) on Friday, decreasing the price of USDCAD to less than 1.3100 following some key economic releases. The technical bias remains bullish because of the higher high in the recent downside move.

USD/CAD Technical Analysis

As of this writing, the pair is being traded around 1.3032. A support can be noted near 1.3003, an immediate horizontal support level ahead of 1.2951, the 38.2% Fib level support level and then 1.2886, a major horizontal support as demonstrated in the given below chart.

USDCAD

 

On the upside, A resistance can be noted around 1.3128, the trend line resistance level ahead of 1.3234, the 23.6% Fib level resistance and then 1.3384, the major horizontal resistance as demonstrated in the given above chart. The technical bias shall remain bullish unless 1.2987 the major horizontal support level remains intact.

The United States Jobless Claims

The number of Americans filing for unemployment benefits fell last week, a sign the labor market was holding firm despite tensions between the United States and it’s trading partners that have led to tit-for-tat tariffs.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 210,000 for the week ended Aug. 18, the Labor Department said on Thursday.

It was the third straight week of declines for claims, which have dropped so low that economists have scrambled for explanations. In July, claims fell to their lowest level since 1969 even though the workforce is much larger than in prior decades.

Economists polled by Reuters ahead of Thursday’s report had forecast claims rising to 215,000 in the latest week.

Generally speaking, a higher number of claims indicates a bearish market for the US Dollar (USD) and vice versa.

Trade Idea

Considering the overall price behavior of the pair over the last couple of days, buying the USDCAD around current levels can be a good decision in short to medium term.

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