USDCAD has continued to slightly retrace lower price levels despite the improved sentiment of the US dollar. This seems to have emanated from the improved inflation figures in Canada as well as the rising investment in the country’s AI sector. This combination has strengthened the Canadian dollar against the US dollar. Let’s further carefully analyze this market below.
Key Price Levels:
Resistance Levels: 1.4200, 1.4400, 1.4600
Support Levels: 1.4000, 1.3800, 1.3600
USDCAD Rebounds Off the 1.4200 Ceiling
Price activity in the USDCAD market has broken through the 1.4000 price level. The market progressed further until it hit the 1.4200 ceiling in the previous session. The ongoing session has continued further downward through the last price candle. Yet, price action stays at a significant distance above all the Moving Average (MA) lines.
The Stochastic Relative Strength Index (RSI) lines have delivered a bearish crossover in the overbought region. However, by careful observation, it seems the lines of the Stochastic RSI are moving a bit hyperactively. Consequently, this suggests that price movement may not fall significantly, and the market may resume upward retracement soon.
USDCAD Seem Out of Steam
Price activity in the USDCAD 4-hour market can be seen extending downward retracement quite alright. However, the last two price candles on the chart seem quite small. This seems to indicate that the market has fallen below the 20-day MA line but is still above the 50-, 100-, and 200-day MA curves, and at a significant distance at that. Meanwhile, downward retracement seems to be losing momentum while still above important technical landmarks.
Also, the Stochastic RSI lines have fallen to the depth of the oversold region. This aligns with the earlier noticed hyperactivity of the Stochastic RSI lines. Consequently, this suggests that the downward force may fizzle out soon, allowing upside forces to take over. Therefore, traders can maintain their target just above the 1.4200 mark.
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