USD/CAD - Could BOC Confirm The Up Reversal?|KOL Analysis•Olimpiu Tuns

USD/CAD changed little today and it could wait for the BOC Rate Statement before resuming its bullish momentum. The rate edged higher in yesterdays session and now is traded at 1.3254 level, far above the broken major downtrend line.

Yesterdays aggressive breakout signals an up reversal on USD/CAD. A dovish BOC could accelerate the bullish momentum, the next significant target is seen around 1.3400 level.

The Bank of Canada is expected to keep the Overnight Rate unchanged at 0.25% in todays meeting. More stimulus measures signaled could ruin the Canadian dollar. The pair is trading in the green at the time of writing and it could hit fresh new highs ahead of the BOC.

Also, the Canadian Housing Starts could drop from 246K to 222K in August weakening the Loonie. USD/CAD has turned to the upside as the USDX has rebounded.

● USD/CAD Downtrend Breakout!

The pair ignored the downtrend line and the downside 50% Fibonacci line of the ascending pitchfork signaling strong buyers. The aggressive breakout could suggest a temporary drop as USD/CAD could come back down to test and retest the broken upside obstacles before resuming its bullish movement, reversal.

USDXs further growth should push USD/CAD higher towards the median line (ML) of the ascending pitchfork. The median line (ML) and the 23.6% retracement level are seen as strong levels, only a breakout above these levels would suggest a broader leg higher.

Technically, the breakout from the major Falling Wedge pattern announces an up reversal. The sentiment has changed due to the USDXs rally. USD/CAD should be bullish as long as it stays above the downtrend line and above the lower median line (LML) of the ascending pitchfork.

RSI and Stochastic have shown a bullish divergence lately but only yesterdays aggressive rally announced the bullish reversal. A strong consolidation, accumulation above the 50% Fibonacci line, or a broken downtrend retest should bring a great long opportunity.

Also, a valid breakout (jump and close) above the 23.6% level and of the median line (ML) will suggest buying as USD/CAD would be expected to resume its upwards movement. The bullish scenario could be invalidated only by a drop below the lower median line (LML) and by another lower low, drop below 1.2992 level.

● XAU/USD Consolidation or Distribution？

Gold continues to move in a range between $2,000 and $1,900 psychological levels. USDs rebound has sent the rate below the 150% Fibonacci line confirming strong selling pressure.

The uptrend is still safe as long as the gold price stays above the $1,900 level and above the upper median line (UML) of the major ascending pitchfork. Tomorrow, the yellow metal could register sharp fluctuations around the ECB.

Closing below $1,900 and below the UML suggests a larger correction in the coming weeks. Another false breakdown below the mentioned support levels suggests buying. The risk-on rally could appear anytime if the COVID-19 crisis worsens or if the ECB announces new stimulus measures to help the Euro-zone economy to recover.

{About the Author}

Olimpiu Tuns is a seasoned market analyst / trader / trainer on the financial markets with expertise in forex, cryptocurrencies, commodities, futures, options, index, CFD for more than 8 years. He is also a famous blogger in both technical and fundamental analysis, trading signals, trade setups, etc.

He has worked as a Market Analyst / Consultant for three major Brokerage companies, Admiral Markets, MultiBank Exchange Group and InstaForex (live webinars, market analysis, educational materials, video analysis, video tutorials, ghostwriting, content creator), as a Social Media Manager and as a Financial Markets & Crypto Analyst / Contributor for very important news portals/blogs (investing.com, benzinga.com, forexalchemy.com actionforex.com, countingpips.com), websites, educational platforms (Forex.Academy, Forex.Today), independent clients, etc.

Olimpiu Tuns currently works as a Financial Markets & Crypto Analyst / Signal Provider / Trader / Trainer.

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