USD/CAD forecast for January 21, 2021
Looking at the chart on the weekly time frame, we see that the USD/CAD pair is in a strong bearish trend and that there is no indication of strength for the trend to change in the coming period. We now need to look at the psychological level at 1.25000 as potential support. Bullish is not an option; for now, technically, there is no signal for such a thing in this time frame.
On the daily time frame, we see a large drop channel. The USD/CAD pair has currently found support at 1.26000 and is currently resisting pressure to fall below that level. Viewed in this way, we can expect a smaller pullback to the moving averages MA20 and MA50 to 1.27300 -1.28000, where then we can expect a rejection again and a continuation of the decline to 1.25000. The dollar is still under great pressure as the new administration wants to adopt a new financial package to help the economy.
On the four-hour time frame, we see that the USD/CAD pair has support at 1.26000 and that now on this time frame, there is a possibility for a smaller pullback. We can use the Fibonacci retracement level to help. Thus, technically, the ideal would be a pullback to a level of 61.8%, which coincides with the upper trend line. This is just a proposal as a short-term option and the possibility of a pullback today due to the calming of the market after the inauguration of the new American president.
From the news for these two currencies, we can single out the following: The National Association of Home Builders released a report Wednesday showing an unexpected drop in confidence among U.S. homebuilders in January. According to Reuters, the World Health Organization (WHO) also supports the faster introduction of covid vaccines, which in turn improves mood. Current market optimism is taking clues from the U.S. where Joe Biden took control of the Oval Office and wrote multiple executive orders to fulfill election promises from day one
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