Technical Analysis – USDCAD pauses four-day slide
USDCAD pauses bearish correction near support area
Technical signals are weak amid holiday-thinned liquidity conditions
All eyes turn to the US core PCE inflation due at 12:30 GMT
USDCAD was trading with soft positive momentum around 1.3547 during Friday’s early European trading hours as investors headed into the Easter holiday.
Technically, the pair found support around its 20-day simple moving average (SMA) after a four-day decline. Notably, the SMA lines played a key role as pivot points during the month of March. Hence, the odds for an upside reversal are high as long as the price holds above those lines in the 1.3500 region. The trendline zone slightly lower at 1.3450-1.3470 could also prevent a crash out of the bullish channel and towards the 1.3345-1.3380 constraining area.
Disappointingly, the technical indicators are not favoring the bulls at the moment. Even though the RSI is trying to rotate higher near its 50 neutral mark, the stochastic oscillator has already started a new negative cycle, while the MACD has slipped below its red signal line, suggesting that sentiment has yet to improve.
Nonetheless, should the 20-day SMA hold steady, there is a possibility for the pair to reverse upwards and revisit the 1.3600 psychological level. A victory there may not excite traders unless the price also crawls above the channel’s upper band at 1.3660. If that scenario unfolds, the door will open for the 1.3700-1.3745 territory and then for the 1.3800 number.
In summary, although the bulls don’t have an advantage according to the technical signals, a recovery phase in USDCAD is possible, as the pair is currently testing a key support zone.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
