USD/CAD downward trend continues – A new 2023 low is on the cards [Video]

USDCAD is moving sideways today, trading a tad above the 2023 low. The bearish trend that commenced since the March 10, 2023 peak remains dominant in this currency pair despite some noteworthy uplegs happening along the way. In addition, a bearish series of lower lows and lower highs is currently in place with the bears aiming for the next trough to take place below the June 27, 2023 low of 1.3116.

With the Average Directional Movement Index (ADX) trading above its 25-threshold and hence confirming the presence of a muted bearish trend in the market, the focus is on the stochastic oscillator. It is edging lower, battling with its moving average (MA). A successful move above the MA would unsettle the bears’ plan, while a drop lower would clearly be seen as a bearish signal by market participants.

Should the bears feel inspired by the overall technical picture, they would try to record a new 2023 low and then target the 61.8% Fibonacci retracement of the April 5, 2022 – October 13, 2022 uptrend at 1.3003. If successful, they could then have a go at the August 20, 2021 high at 1.2948 and possibly be given the chance to record the lowest print since August 2022.

On the other hand, the bulls are anxiously trying to push USDCAD above the busy 1.3190-1.3225 range populated by the July 14, 2022 high, the November 15, 2022 low and the 50% Fibonacci retracement respectively. They could then have the chance of testing the resistance set by both the March 10, 2023 downward sloping trendline and key 1.3300-1.3329 range. Even higher, the 38.2% Fibonacci retracement at 1.3385 awaits the bulls.

To sum up, USDCAD bears feel in control of the market and ready to record a new 2023 low if the stochastic oscillator provides the appropriate signal.