- USD/CAD could breach the major support at the 1.3450 level.
- Technical indicators suggest a potential momentum shift towards a downward trend.
- A break above 1.3500 could lead the pair to test the weekly high at 1.3536 and the major barrier at 1.3550.
USD/CAD moves in a downward direction for the second consecutive day, trading around 1.3460 during the European session on Thursday. The pair is positioned just above the major support level of 1.3450. The technical analysis of the 14-day Relative Strength Index (RSI) is positioned below 50, suggesting bearish momentum for the USD/CAD pair.
A break below the major support could put downward pressure on the USD/CAD pair to test the support level of the 38.2% Fibonacci retracement level at 1.3430. If the pair breaches the latter, it could navigate the psychological support region at 1.3400 level followed by the 50.0% retracement level of 1.3381.
Additionally, the lagging indicator Moving Average Convergence Divergence (MACD) for the USD/CAD pair suggests a possible shift in momentum towards a downward trend in the market. This assessment is derived from the positioning of the MACD line above the centerline but below the signal line. Traders may opt to await clearer directional sentiment from the MACD indicator before making trading decisions.
On the upside, the USD/CAD pair may encounter significant resistance at the psychological level of 1.3500. A decisive breakthrough above this psychological resistance could generate positive sentiment, potentially propelling the pair to test the resistance zone around the weekly high at 1.3536 and the major barrier at 1.3550. Further upside momentum could see the pair approaching the February high at 1.3586.
USD/CAD: Daily Chart
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