- The previous week was bad for USD/CAD as we saw a drop to 1.33586.
- The US dollar against the Chinese yuan rose yesterday to its highest level in two weeks at 7.22459.
USDCAD chart analysis
The previous week was bad for USD/CAD as we saw a drop to 1.33586. After receiving support on Wednesday at this level, the pair began an upward consolidation such that on Friday, before the market closed, we rose to the 1.34670 level. Monday brought us a bullish continuation and a jump to the 1.35440 level. During the previous Asian trading session, the pair pulled back and successfully tested the 1.35000 level, starting a new bullish consolidation.
Now, we are once again in a position to test the previous high and perhaps see a breakout higher and a new level formed. Possible higher targets are 1.35500 and 1.35600 levels. We need to pull back below the 1.35000 support level for a bearish option. This would put us under bearish momentum to continue falling further. Possible lower targets are 1.34800 and 1.34600 levels.
USDCNH chart analysis
The US dollar against the Chinese yuan rose yesterday to its highest level in two weeks at 7.22459. In that area, we faced resistance and began to decline during the previous Asian session. The pair is now at 7.19820 and testing support at the EMA200. Last week we managed to stay above it, and we expect that now. New support would lead to bullish consolidation. A move above 7.21000 will give us enough room to maneuver before the next impulsive wave.
Possible higher targets are 7.21500 and 7.22000 levels. USDCNH falling below EMA200 levels to 7.19000 would increase pressure on the dollar. This would form a new weekly low and confirm the bearish option. With this pullback, USDCNH will lose its previous upward momentum, and potential lower targets are the 7.18000 and 7.17000 levels.
