-
USDCAD pauses aggressive bull run near five-month high.
-
Faces resistance around 1.3800, but remains supported above 1.3690.
USDCAD attempted to re-enter the 1.3800 territory earlier today after its pullback from a five-month high of 1.3844 on Wednesday. But upside forces faded soon, forcing the price to pull back to Thursday’s closing price of 1.3765.
The RSI and the stochastic oscillator have exited the overbought territory, justifying the latest negative turn in the price. That said, the RSI is still comfortably elevated above its 50 neutral mark and the MACD is well above its red signal line, providing a ray of hope that the bulls could still show up.
Should the bears break below the 78.6% Fibonacci retracement of the November-December downleg at 1.3743, there is a possibility of another decline to retest the upper band of the broken bullish channel at 1.3690. An extension lower could stabilize somewhere between the 20-day simple moving average (SMA) and the 1.3600 round level. If not, the sell-off could continue towards the 50-day SMA at 1.3565.
In the positive scenario, where the pair closes back above 1.3800, it may face another tough battle within the 2023 peak area of 1.3860-1.3898. Once the border is successfully penetrated, the next target will be the 2022 top of 1.3976, while higher, the bulls might encounter resistance somewhere between the 1.4040 barrier seen in May 2020 and the psychological level of 1.4100.
To summarize, USDCAD has switched to a neutral mode and is awaiting a decisive move above 1.3800 or below 1.3690 to determine its next direction.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.