USDCAD plunged by 1.2% in the first trading day of June, sliding back below its simple moving averages (SMAs) to mark a new two-week low of 1.3417 on Friday.
The fast downside correction follows the double top creation around the tough resistance of 1.3650, which raised the risk of a bearish continuation. Overall, there are barely any bullish signs in the market, although a pause or a rebound near the 1.3400 level cannot be excluded as the stochastic oscillator is quickly approaching its 20 oversold level. The RSI has crossed back below its 50 neutral mark, while the MACD has inched below its red signal line. Moreover, the price is trading some distance above the lower Bollinger band, suggesting that the decline has still some room to run.
In trend signals, a bearish cross between shorter and longer SMAs is in progress. If successfully completed, traders may start to worry about a broad negative trend reversal, especially if the price breaks its six-month range below the 1.3340 floor. This is where the 38.2% Fibonacci retracement of the 1.4667-1.2007 downleg intersects the support line from November. Hence, a decisive close lower and below 1.3300 could see a depreciation towards the key 1.3225 handle. Another breakdown here may drive the pair towards the 1.3135 barrier.
Conversely, a bounce back above the SMAs at 1.3500 might lift the price up to the 1.3650 ceiling. A move higher could initially stall around the constraining zone of 1.3740 before targeting the tough 1.3800-1.3820 resistance territory. The bulls will need to climb that wall to clear the way towards the 2022 top of 1.3976.
In brief, USDCAD could stay under sellers’ control in the short term, with the confirmation signal expected to come below 1.3400.
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 snaps its four-day losing streak, hovers around 1.0650, focus on German IFO data
The EUR/USD pair snaps its four-day losing streak during the early Asian session on Monday. Market participants will digest the outcome of the Federal Reserve (Fed) meeting last week and await the US Core Personal Consumption Expenditure (PCE) index data due on Thursday.
GBP/USD heads for lowest weekly close since March
GBP/USD is holding firm with weekly losses, unable to move away from 1.2200. The Pound is among the worst performers of the week after the Bank of England's decision to keep interest rates unchanged.
Gold consolidates above $1,920 ass US yields edge lower
Gold price clings to small recovery gains above $1,920 following Thursday's sharp decline. Following the mixed September PMI data from the US, the benchmark 10-year US Treasury bond yield is down nearly 1% on the day at around 4.45%, allowing XAU/USD to stay in positive territory.
Worldcoin Price Prediction: Is WLD done with uptrend after 77% rally?
Worldcoin price has paused its uptrend as it currently trades at $1.57. This move comes after the altcoin rallied a whopping 77% in just three days, between September 13 and 16. As WLD hovers aimlessly, investors need to be patient to catch the next volatile move.
Week ahead – US core PCE and Eurozone flash CPIs eyed after rate pause signals [Video]
![Week ahead – US core PCE and Eurozone flash CPIs eyed after rate pause signals [Video]](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Prices/CPI/consumer-price-index-gm500080630-80587217_XtraSmall.jpg)
PCE inflation to grab attention on Friday as Fed signals higher for longer. But markets might be more worried about a government shutdown. Eurozone flash CPIs will also be the in the spotlight on Friday. Chinese PMIs to be watched for recovery signs.