USD/CAD Eyes More Gains, US GDP Next

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Key Highlights

• USD/CAD gained pace and tested the 1.3060 resistance zone.
• A major bullish trend line is forming with support near 1.2965 on the 4-hours chart.
• EUR/USD and GBP/USD remain at a risk of more downsides.
• The US GDP could contract 0.8% in Q2 2022 (Preliminary).

USD/CAD Technical Analysis

The US Dollar formed a base above the 1.2740 level against the Canadian Dollar. USD/CAD climbed above the 1.2880 and 1.2900 resistance levels to move into a positive zone.

Looking at the 4-hours chart, the pair settled above the 1.2900 zone, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours). The pair even broke the 1.3000 resistance zone.

However, the bears were active near the 1.3060 zone. A high was formed near 1.3063 and the pair started a downside correction. There was a move below the 1.3000 support.

The pair even traded below 1.2980, but the bulls were active above 1.2950. There is also a major bullish trend line forming with support near 1.2965 on the same chart. If there is a downside break below the trend line, the pair could decline towards the 1.2880 support and the 100 simple moving average (red, 4-hours).

Conversely, the pair might rise again above 1.3040. On the upside, the pair is facing resistance near the 1.3060 level. The next major resistance is near the 1.3120 level. A clear move above the 1.3120 resistance might send the pair higher towards the 1.3200 level.

Looking at EUR/USD, the pair remained below the parity level and might extend losses below 0.9900. Similarly, GBP/USD might dive below the 1.1720 support.

Economic Releases

• German IFO Business Climate Index for August 2022 – Forecast 86.8, versus 88.6 previous.
• US Gross Domestic Product Q2 2022 (Preliminary) – Forecast -0.8% versus previous -0.9%.
• US Initial Jobless Claims – Forecast 253K, versus 250K previous.
• Jackson Hole Symposium.