USD/CAD Reaches Bearish Exhaustion, May Resume Upward Move

USD/CAD Reaches Bearish Exhaustion, May Resume Upward Move

Key Resistance Levels: 1.4200, 1.4400, 1.4600
Key Support Levels: 1.3400, 1.3200, 1.3000

USD/CAD Price Long-term Trend: Bearish
For the past 48 hours, the USD/CAD pair slumped to the low of 1.2384. This was the previous low of March 17. On March 17 price action; the bears push the currency price to the historical price level as bulls buy the dips. The market resumed an upside momentum and price rallied to level 1.2650 on March 30. The uptrend was terminated on March 30 as the currency pair resumed a range-bound movement below level 1.2650. Today, the market is likely to make a repeat of the previous price action.

USD/CAD – Daily Chart

Daily Chart Indicators Reading:
The moving averages are sloping downward indicating the downtrend. USD/CAD is at level 38 of the Relative Strength Index period 14. It indicates that the pair is approaching the oversold region of the market.

USD/CAD Medium-term Trend: Bearish
On the 4-hour chart, the pair is in a downward move. On March 26, the currency pair fell to a low of level 1.2384 which was the previous support of March 17. That is, on April 21 downtrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that USD/CAD will fall to level 1.272 Fibonacci extension or the low of 1.2403 and reverse. From the price action, the market has fallen to the Fibonacci 1.272 extension and there is a likelihood of price reversal. However, the reversal will not be immediate.

USD/CAD – 4 Hour Chart

4-hour Chart Indicators Reading
USD/CAD is below the 20% range of the daily stochastic. It indicates that the pair has fallen into the oversold region of the market. Buyers are expected to emerge in the oversold region of the market. Presently, the SMAs are sloping downward indicating the downtrend.

General Outlook for USD/CAD
USD/CAD pair has reached bearish exhaustion as price fell to the low of level 1.2384. The currency is now consolidating above the current support. The market will resume upward but not immediately. The market has been oversold since April 21.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.