The momentum surge following the US election has cooled down, and economic data is beginning to take center stage. As a result, USDCAD has pulled back from yesterday’s price increase. However, more intrigue may be anticipated as the pair seems loaded with fundamental factors.
Key Price Levels:
Resistance Levels: 1.3900, 1.4000, 1.4100
Support Levels: 1.3800, 1.3700, 1.3600
USDCAD Holds to Previous Gains
The downward retracement in the USDCAD daily market has not been able to completely erase yesterday’s gains. Consequently, the price still stands above the 1.3849 price level. Additionally, price action remains above all the Moving Average (MA) lines.
Meanwhile, the Stochastic Relative Strength Index (RSI) lines have fallen towards the oversold region. These leading lines of the indicator are now deflecting toward the lagging lines for a potential crossover. Should the crossover occur, the market may resume its upward retracement, but more cautious consideration is needed in this market.
Downward Retracement in the USDCAD Market Looks Bolstered
The USDCAD 4-hour market suggests that bearish sentiment is increasing. This may be due to the downward retracement in the US Dollar Index (DXY) and US Treasury yields, combined with the Canadian Dollar’s benefit from improved oil prices. This hints that the Canadian dollar may be generating some headwind for the pair.
Nevertheless, price action remains above the 1.3849 support level. Also, the Stochastic RSI lines are in the overbought region but are trending downward. While investors anticipate the Bank of Canada rate decision, which may strengthen the downward retracement, bearish traders can target the 1.3850 price level.
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