Technical Analysis – USDCAD needs a close above 1.3830
- USDCAD prints fresh highs but has tough time closing above 1.3830
- Technical signals reflect fragile buying sentiment
- BoC rate decision due on Wednesday at 13:45 GMT
USDCAD reached a new high of 1.3848 on Monday, but it pulled back to end the day just below that crucial 1.3830 level, which aligns with the 78.6% Fibonacci retracement of the August-September downtrend.
With the RSI hanging around the 70 overbought mark and the MACD hovering near its October 2023 highs, a significant rally in the short term seems uncertain. Hence, for a solid move above the August bar of 1.3874 and the 1.3900 psychological level, the bulls will need new tailwinds, particularly if they want to crawl towards the 2022 high of 1.3976.
In any case, traders may want to keep their positions unless they see a correction below the 1.3780 area. If that happens, the spotlight may shift to the 61.8% Fibonacci level at 1.3743 and the support line at 1.3730. If the price doesn’t bounce back from there, the decline could continue towards the 20-day exponential moving average at 1.3690 and then down to the 50-day EMA around 1.3660.
In summary, it looks like USDCAD has some challenges ahead. Strong buying is needed for a close above the 1.3874-1.3900 range, while a drop below 1.3780 might spark the next bearish wave.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
