USD/CAD forecast for January 8
Looking at the weekly time frame graph, we see that the pair is now at a Fibonacci level of 38.2% at 1.26700. The bearish scenario is still in force, and we can expect a sequel in the coming period. Before that, it is possible to consolidate at this Fibonacci level for the dollar to take a break. On the upper side, we also have a trend line, which is a big resistance to the bullish trend; for now, if we see a pullback, we can maximally expect it to 1.30000, which would now be a big profit if the dollar achieved it.
We see a large falling channel on the daily time frame, and the pair found current support at 1.26150. On the upper side, we have the resistance indicator moving averages from MA20 to MA200. For a potential bullish trend, we need a break above the MA20 (light blue line), and after that, we will see the setting of our candlesticks. Our trading should be limited within this channel, and if we see a break outside the channel, then we can analyze for a better picture in the coming period. The bearish scenario is still in force.
On the four-hour time frame, we see a long-term declining trend from a certain pullback to moving averages, and on the moving average, the MA200 (purple line) is, for now, a big hurdle for this pair on the H4 to reverse the bullish trend. In essence, the indicators help us see and predict how potential direction the pair will move in the next period, based on the previous candlesticks on the chart.
From the news, we can single out: The activity of the USA’s service sector unexpectedly grew at a faster pace in December, according to a report published on Thursday by the Institute for Supply Management. ISM said its service PMI rose to 57.2 in December from 55.9 in November, and a reading above 50 indicates growth in the service sector. Economists expected the index to fall to 54.6. The supplier delivery index also jumped to 62.8 in December from 57.0 in November, although the index is reversed, and a reading above 50 percent indicates slower deliveries.
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