Technical Analysis – USDCAD moves higher; it feels like an overdue correction
July 5, 2023 2:25 pm
USDCAD is making small gains today but it remains close to the 2023 lows of 1.3116 recorded on June 27. The bulls are clearly trying to build upon the recent bounce higher from the 1.3190 level, getting strong support from the stochastic oscillator. This indicator is moving higher, building a gap between its moving average and thus pointing to a decent bullish momentum.
However, the Average Directional Movement Index (ADX) does not share the bulls’ enthusiasm. It is edging lower, below its 25-threshould and well into range-trading territory. In the meantime, the continued convergence of the 100- and 200-day simple moving averages (SMAs) keeps the door open to an imminent move, with the bulls hoping that this move proves to be in their favour.
The bulls are keen on continuing the current upleg, with the next resistance expected at the 1.3300-1.3314 range. Higher, the busy 1.3375-1.3398 range, defined by the 38.2% Fibonacci retracement of the April 5, 2022 – October 13, 2022 uptrend and 50-day SMA, could prove tougher to crack. The door will then be open for a retest of the key 1.3494-1.3504 range.
Should the bears decide to ignore the mixed momentum indicators, they would try to clear the support set at the 1.3225 level. They could then target the 50% Fibonacci retracement at 1.3190, hoping for a decisive break below this level. If successful, they could set their eyes on the 61.8% Fibonacci retracement at 1.3003.
To sum up, USDCAD bulls are trying to extend the current upleg, supported by the bullish stochastic oscillator. However, they have to clear key levels in order to declare the start of a new bullish trend.
USDCAD is making small gains today but it remains close to the 2023 lows of 1.3116 recorded on June 27. The bulls are clearly trying to build upon the recent bounce higher from the 1.3190 level, getting strong support from the stochastic oscillator. This indicator is moving higher, building a gap between its moving average and thus pointing to a decent bullish momentum.
However, the Average Directional Movement Index (ADX) does not share the bulls’ enthusiasm. It is edging lower, below its 25-threshould and well into range-trading territory. In the meantime, the continued convergence of the 100- and 200-day simple moving averages (SMAs) keeps the door open to an imminent move, with the bulls hoping that this move proves to be in their favour.
The bulls are keen on continuing the current upleg, with the next resistance expected at the 1.3300-1.3314 range. Higher, the busy 1.3375-1.3398 range, defined by the 38.2% Fibonacci retracement of the April 5, 2022 – October 13, 2022 uptrend and 50-day SMA, could prove tougher to crack. The door will then be open for a retest of the key 1.3494-1.3504 range.
Should the bears decide to ignore the mixed momentum indicators, they would try to clear the support set at the 1.3225 level. They could then target the 50% Fibonacci retracement at 1.3190, hoping for a decisive break below this level. If successful, they could set their eyes on the 61.8% Fibonacci retracement at 1.3003.
To sum up, USDCAD bulls are trying to extend the current upleg, supported by the bullish stochastic oscillator. However, they have to clear key levels in order to declare the start of a new bullish trend.
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