USD/CAD Price Analysis: Doji formation on a pullback towards the 200-EMA strengthens loonie
- Loonie bulls are strengthened on multiple downside filters.
- The confluence of Doji, 200-EMA, and the lower boundary of ascending triangle has bolstered the signs of weakness.
- A slippage below 20-EMA has also turned the momentum indicators on the downside.
The USD/CAD pair has witnessed a steep fall in the Asian session after slipping below Monday’s low at 1.2603. The asset is dropping firmly despite the strength in the US dollar index (DXY).
The confluence of Doji candlestick formation after a pullback towards the 200-period Exponential Moving Average (EMA) at 1.2640 and the lower boundary of the ascending triangle on the daily scale after a downside break has raised the odds of a dominant performance by the loonie bulls ahead.
The horizontal resistance of the chart pattern is placed from 20 August 2021 high at 1.2950 while the ascending trendline is plotted from June 2021 low at 1.2007.
A slippage below Monday’s low at 1.2603 has activated the formation of the Doji candlestick pattern. The asset has also tumbled below the 20-EMA at 1.2590, which adds to the downside filters. Meanwhile, the Relative Strength Index (RSI) (14) has faced resistance near 60.00, which signals that the greenback bulls lack strength.
Should the asset drop below March’s last traded price at 1.2503, loonie bulls will drag the asset towards January’s low at 1.2451, followed by the round level support of 1.2400.
On the flip side, greenback bulls may take the charge if the asset surpass Wednesday’s high at 1.2676, which will send the asset towards March 17 high at 1.2699. A breach of the March 17 high will drive the asset towards the March 16 high at 1.2778.
USD/CAD daily chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
