The long-term technical outlook for the USD/CAD exchange rate appears overtly bearish, as price slides to multi-year lows and continues to drift towards the neckline of the Double Top reversal pattern formed in March of last year.
With a Death Cross moving average formation taking shape, and the RSI continuing to hover below 40, the path of least resistance seems lower.
However, with price struggling to hurdle key support at the April 2018 low (1.2527), a short-term correction back towards psychological resistance at 1.2800 could be on the cards.
Daily timeframe hints at the possibility of a near-term reversal higher, as price tracks within a bullish Falling Wedge pattern and remains constructively perched above 1.2600.
A daily close above the trend-defining 55-EMA (1.2728) and wedge resistance could intensify buying pressure and ignite an impulsive upside move to challenge the yearly high (1.2881).
However, if wedge resistance remains intact, an extended move lower looks relatively likely, with a daily close below 1.2600 likely carving a path for the exchange rate to retest the yearly low (1.2468).
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