Key Resistance Levels: 1.42000, 1.44000, 1.46000
Key Support Levels: 1.34000, 1.32000, 1.30000
USD/CAD Price Long-term Trend: Bearish
The Loonie is in a bear market. The Canadian dollar reached a high of level 1.46 and was overbought. Sellers emerge to propel price downward. A bull candle tested 0.618 Fibonacci retracement level. This determines the extent of a downward move. According to the Fibonacci tool, the Canadian dollar is likely to reverse at 1.618 extension levels. This is because a bull candle has tested the 0.618 retracement level.
Daily Chart Indicators Reading:
The 50-day SMA and the 21-day SMA are sloping downward indicating the bearish trend. The Loonie has fallen to level 38 of the Relative Strength Index. This indicates that the pair is in the downtrend and approaching the oversold region.
USD/CAD Medium-term Trend: Ranging
On the 4-hour chart, the pair is in a horizontal channel. The price is fluctuating between levels 1.39 and 1.46. The price tests the lower and upper price range but could not break it. However, on May 26, the bears broke the lower price range, which signals the resumption of the downtrend.
4-hour Chart Indicators Reading
Presently, the SMAs are sloping horizontally indicating the earlier sideways move. The Loonie is below 20% range of the daily stochastic. It implies that the market is in the oversold region. Buyers are yet to emerge as the pair continues to remain oversold.
General Outlook for USD/CAD
The USD/CAD pair is on a downward move. The Canadian dollar is already in the oversold region. However, as the downtrend is ongoing the oversold condition does not hold. This is because the pair is in a strong bearish momentum.
Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results
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