USDCAD was on a sharp downward trajectory since early August, falling from above $1.31 down to 1.2762 on Thursday. There was a reversal this morning but there are no clear signals yet if this move up can be sustained. The overall picture is quite bearish and RSI is below 50 in bearish territory. Also, the market is below the 200-day moving average (this support the bearish view).
USDCAD was on the rise from the June low of 1.2653 to the July high of 1.3252 but the uptrend stalled at the 1.3250 area and reversed back down. This is now major resistance at 1.3250. The market has retraced 78.6% of this uptrend and is finding support at this Fibonacci level at 1.2780.
The downside bias remains strong though as prices have fallen for 9 straight days, so such consistency could mean a strong trend. The key psychological level at 1.2700 is the next target for further downside moves below yesterday’s low of 1.2762. Then the June 8 low of 1.2653 comes into view.
The market would have to rebound back above the 200-day moving average at 1.2930 and above the key 1.3000 level in order to shift the bearish bias.
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