USD/CAD Price Analysis: Tests 50-HMA after rising wedge breakdown
- USD/CAD bulls trying to defend the 50-HMA support.
- The spot has charted a rising wedge break down on the hourly sticks.
- Rejection at 200-DMA prompted the U-turn in the prices.
USD/CAD is on a freefall over the last hours after the bulls failed to take out powerful resistance at the 200-hourly moving average (HMA), now at 1.2175.
With the corrective decline, the spot has charted a rising wedge break down the hourly sticks after it breached the crucial support at 1.2158. That zone is the confluence of the rising trendline and 21-HMA.
The mildly bullish 50-HMA at 1.2133 is currently testing the bearish commitments. A breach of the last could expose the 100-HMA at 1.2118.
The Relative Strength Index (RSI) edges lower within the bearish region, suggesting that there is more room to the downside.
However, the bears could bid time before the next push lower, awaiting the dollar’s reaction to the US Retail Sales release.
USD/CAD: Hourly chart
Any pullback will have to crack the 1.2160 resistance zone, the previous support now an upside barrier.
A sustained move above the latter could see the buyers once again yearning for the 200-HMA.
At the time of writing, the major is shedding 0.20% to trade around 1.2135, having felt the pull of gravity due to fresh declines in the US dollar.
Additionally, the 1% bounce in WTI prices boosts the Canadian dollar, exerting downside pressure on the spot.
The US oil rebounded this Friday after dropping 3% a day before, in response to rising covid cases in India and the news about the Colonial pipeline restart.
USD/CAD: Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
