Technical Analysis – USDCAD corrects lower after eight weeks
September 12, 2023 2:27 pm
USDCAD trims some gains after eight consecutive weeks of gains
Level of confidence weakens but uptrend intact
Focus stays on 1.3570
USDCAD faced some profit-taking marginally below the 1.3700 round level, erasing some gains to meet support near its 20-day simple moving average (SMA) at 1.3570. The line was last tested on the first trading day of September.
The RSI has marked a new lower low above its 50 neutral mark, signifying diminishing buying interest. The negative trajectory in the Stochastic oscillator and the weakness in the MACD are reflecting dull dynamics as well.
Traders might also pay attention to the 23.6% Fibonacci mark of the latest upleg at 1.3550 if selling forces return. A decisive close lower could spark a new bearish correction towards the 200-day SMA and the 38.25 Fibonacci of 1.3460. Then, the focus would shift to the 1.3380-1.3400 region composed by the 50-day SMA and the almost flat support trendline drawn from November. The 50% Fibonacci level is in the neighborhood as well.
In the event the 1.3570 floor stands firm and the price clearly pushes above the 20-day SMA, the bulls could head again for the 1.3700 mark. Yet, only a successful rally above the 2020 resistance line at 1.3750 would brighten the market outlook, probably prompting an extension towards the 1.3800 round level. The 2023 top of 1.3860 might next attract special interest before all eyes turn to the 2022 peak of 1.3976.
Summing up, USDCAD has not escaped downside risks despite stabilizing its latest decline near a familiar support territory. The pair might need a sustainable rally above 1.3700-1.3740 to activate fresh buying, whereas a drop below 1.3570-1.3550 could lead to additional losses.
USDCAD trims some gains after eight consecutive weeks of gains
Level of confidence weakens but uptrend intact
Focus stays on 1.3570
USDCAD faced some profit-taking marginally below the 1.3700 round level, erasing some gains to meet support near its 20-day simple moving average (SMA) at 1.3570. The line was last tested on the first trading day of September.
The RSI has marked a new lower low above its 50 neutral mark, signifying diminishing buying interest. The negative trajectory in the Stochastic oscillator and the weakness in the MACD are reflecting dull dynamics as well.
Traders might also pay attention to the 23.6% Fibonacci mark of the latest upleg at 1.3550 if selling forces return. A decisive close lower could spark a new bearish correction towards the 200-day SMA and the 38.25 Fibonacci of 1.3460. Then, the focus would shift to the 1.3380-1.3400 region composed by the 50-day SMA and the almost flat support trendline drawn from November. The 50% Fibonacci level is in the neighborhood as well.
In the event the 1.3570 floor stands firm and the price clearly pushes above the 20-day SMA, the bulls could head again for the 1.3700 mark. Yet, only a successful rally above the 2020 resistance line at 1.3750 would brighten the market outlook, probably prompting an extension towards the 1.3800 round level. The 2023 top of 1.3860 might next attract special interest before all eyes turn to the 2022 peak of 1.3976.
Summing up, USDCAD has not escaped downside risks despite stabilizing its latest decline near a familiar support territory. The pair might need a sustainable rally above 1.3700-1.3740 to activate fresh buying, whereas a drop below 1.3570-1.3550 could lead to additional losses.
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