FxWirePro: USDCAD upside capped by 55- day EMA, good to sell on rallies

Ichimoku analysis (4-hour chart)

Tenken-Sen- 1.360061

Kijun-Sen- 1.35740

USDCAD has lost more than 150 pips after hitting a minor top around 1.37135. Canada's trade deficit narrowed to $677 million in May as exports rose and imports fell. The exports surged by 6.7% to $34.6 billion and imports shrank by 3.9% to $35.3 billion. It hits an intraday low of 1.35534 and is currently trading around 1.35745.

WTI Crude oil is holding above $40 after better than expected U.S Nonfarm data. But upside might be capped due to the outbreak of the second wave of coronavirus. Any break above $41.62 confirms further bullishness.

Technically, significant support stands at 1.3540, and any violation below targets 1.34808/1.3450 (61.8% fib). The near term resistance is at 1.3720 (trend line resistance), an indicative break beyond will take the pair to the next level till 1.3780/1.3830.

It is good to sell on rallies around 1.3638-40 with SL around 1.3700 for the TP of 1.3450.