USD/CAD Price Analysis: Gravestone Doji, overbought RSI highlights 1.3440 support confluence
|- USD/CAD retreats from the highest levels in a fortnight, snaps two-day uptrend.
- Bearish candlestick formation, overbought RSI (14) signals pullback.
- Convergence of two-day-old support line, previous resistance from November 10 challenge bears.
- Bulls need validation from 200-DMA to suggest further upside.
USD/CAD prints mild losses around 1.3490 as it probes the two-day uptrend at the highest levels in a fortnight during early Tuesday.
In doing so, the Loonie pair justifies the bearish candlestick formation, namely the Gravestone Doji, on the four-hour play. Also supporting the pullback move is the RSI (14) line that stays near the overbought region.
As a result, the quote’s pullback towards the 1.3440 support confluence, encompassing an ascending trend line from Friday and the resistance-turned-support from November 10, appears imminent.
However, the 1.3400 threshold and a two-week-old upward-sloping trend line near 1.3340 could challenge the USD/CAD bears afterward.
In the case where the pair remains bearish past 1.3340, the odds of witnessing a fresh monthly low, currently around 1.3225, can’t be ruled out.
Meanwhile, the USD/CAD pair’s upside momentum needs a successful break above the 1.3500 round figure to defy the bearish candlestick formation. Even so, the 200-SMA level surrounding 1.3530 could challenge the pair buyers.
Should the quote manage to remain firmer beyond the 200-SMA, a run-up toward the monthly high near 1.3810 could gain more acceptance.
USD/CAD: Four-hour chart
Trend: Pullback expected
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