USD/CAD Price Analysis: Bears are in the market and eye test of 1.3400

USD/CAD bears lurking below a 38.2% Fibonacci retracement area.
Bears look to the target area of the 1.3400s.

Ross J Burland FXStreet

As per the prior USD/CAD analysis, USD/CAD Price Analysis: Bears are in control and target a break of daily lows, the price dropped accordingly and the bears are in the clear for a run to test 1.3400.

USD/CAD prior analysis

It was argued that ´´the bears will stay the course and break below the recent lows for a bearish extension.´´

When moving down to the 4-hour chart, it was stated that ´´the price was meeting resistance very close to the daily 38.2% Fibonacci ... breaking 4-hour structure to the downside, as illustrated below:

The price is on the back side of the prior 4-hour bullish trend/correction, and the M-formation can be regarded as a topping pattern. The neckline of the pattern might act as resistance on a pullback and lead to a subsequent lower low to target the 1.3440-50s.´´

It was also argued that a break below 1.3440 opened the risk to test 1.3400 prior lows and bearish extensions as per the weekly chart, as illustrated at the beginning of the prior top-down analysis.

USD/CAD update, live charts

The price has come in a stone's throw´s distance from 1.3400, reaching a low of 1.3428 so far on the day. We are likely to see consolidation at this juncture, however.

USD/CAD H1 chart

On the hourly chart, we can see that the price is being rejected at old support again. A 38.2% Fibonacci retracement aligns with prior support that would be expected to act as resistance on a restest while the bears commit to the front side of the bearish trend. This in turn could lead to an additional push lower and into the target area of the 1.3400s.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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