USD/CAD Long-Term Analysis: Bearish
USD/CAD is in a downward move after the bears broke below the moving averages. Before the current price action, the bulls have made several attempts to break above level 1.2800 resistance. For the past four months, the pair had been in a range-bound move below level 1.2800 overhead resistance. The bulls failed to keep the price above the overhead resistance. Meanwhile, on September 28 downtrend, a retraced candle body tested the 50% Fibonacci retracement level. The retracement indicates that USD/CAD will fall to level 2.0 Fibonacci extension or level 1.2298. From the price action, the market has reached the low of level 1.2547.
USD/CAD Indicator Analysis
The pair is at level 41 of the Relative Strength Index period 14. It indicates that the pair is in the downtrend zone and capable of falling on the upside. The 21-day and 50-day SMAs are sloping horizontally indicating the sideways trend. USD/CAD is below the 20% range of the daily stochastic. The currency pair is in a bearish momentum. Besides, the market has reached the oversold region. The selling pressure is likely to end while we expect the emergence of buyers.
Technical indicators:
Major Resistance Levels – 1.3300, 1.3400, 1.3500
Major Support Levels – 1.2300, 1.2200, 1.2100
What Is the Next Direction for USD/CAD?
On the 4 Hour Chart, USD/CAD is in a downward move. The pair has fallen to the oversold region after breaking below the moving averages. The selling pressure has resumed after retesting the 21-day SMA. Meanwhile, on October 4 downtrend, a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that USD/CAD will fall but reverse at level 2.0 Fibonacci extension or level 1.2488.
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