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USDCAD May Proceed Lower Following Renewed Caution in the USD

Johnathon Fox
08/29/2024 | UPDATED ON: 08/29/2024

Price activity in the USDCAD market may extend its downward correction due to the arrival of moderate CPI data. Additionally, the market has resumed a speculative mood ahead of the potential rate cut in September. Further impetus may be gathered from the upcoming US inflation data, which is set to be released on Friday.

Key Price Levels:
Resistance Levels: 1.3500, 1.3600, 1.3700
Support Levels: 1.3400, 1.3300, 1.3200

 

USDCAD May Proceed Lower Following Renewed Caution in the USD

USDCAD Will Likely Descend to Lower

The USDCAD market had earlier rebounded upwards in the previous session, but the momentum failed to hold. Despite this, the rebound occurred far below the middle limit of the Bollinger Bands (BB) indicator, placing the rebound under significant pressure. The market has shown that prices may continue downward in the ongoing session.

The cautious mood in the US dollar ahead of the inflation data may contribute to this. Meanwhile, the Stochastic Relative Strength Index (Stochastic RSI) curves can still be seen projecting upwards in the overbought region. However, this is due to the gains seen in the previous session, as the downward retracement hasn’t erased all the gains recorded since then.

USDCAD May Proceed Lower Following Renewed Caution in the USD

USDCAD Upside Forces Are Attempting to Break the Downward Retracement

Price activity in the 4-hour USDCAD market had earlier attempted to cross a key level on the technical indicator. However, the middle band of the Bollinger Bands indicator posed a strong resistance, resulting in a rebound-off. Nevertheless, it appears that the ongoing session is facing opposition from market forces, as evidenced by the appearance of an upper shadow on the last price candle.

The Bollinger Bands also seem contracted, suggesting that the market may experience a one-sided price move. Meanwhile, the Stochastic RSI lines are in the overbought region but have a downward trajectory. This hints that the market may descend toward and below the 1.3440 level. Subsequently, more movement can be anticipated following the release of the expected economic news.

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About Johnathon Fox

Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world.

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