USD/CAD vulnerable to more downside [Video]
|-
USDCAD gives up weekly gains; might be due to a pullback.
-
Potential support could next emerge near 1.3400.
-
US core PCE inflation index on the agenda.
USDCAD erased Tuesday’s bounce as the 20-day simple moving average (SMA) obstructed progress, forcing the price to ease towards its 50- and 200-day SMAs at 1.3450. This is also where the 38.2% Fibonacci mark of the previous upleg is placed.
Market sentiment is neutral-to-bearish according to the technical indicators. The MACD is marginally below its zero and signal lines, while the RSI has resumed its negative slope below 50, but is still above its previous lows. Likewise, the stochastic oscillator has also rotated southwards.
If sellers persist, the nearest pivot point could develop around the 50% Fibonacci of 1.3392 and the important almost flat constraining line drawn from November 2022. Additional declines from there could encounter the upper band of the broken bearish channel as well as the 61.8% Fibonacci mark of 1.3320. A clear close lower could confirm another correction towards the 2021 ascending trendline currently intersecting the 78.6% Fibonacci of 1.3220.
On the upside, the focus will be on the 20-day SMA and the 23.6% Fibonacci level of 1.3550. A successful penetration higher could initially stabilize near the 1.3600 psychological number before accelerating towards September’s high of 1.3693 and the long-term descending trendline from the 2020 top at 1.3700.
In summary, USDCAD is displaying signs of softening, bringing the 1.3400 area next to the limelight.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.