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Thursday, 13 April 2017 11:32 Written by

Technical Analysis – USDCAD downfall continues; pair posts 2-week low

Posted on April 13, 2017 at 10:26 am GMT by the XM Investment Research Desk

 


USDCAD is on its sixth straight day of declines, recording a more than two-week low during today’s trading as well. The pair is currently eyeing the 200-day moving average while yesterday it fell below the 50-day one.

Adding to the bearish short-term bias is the RSI indicator, which rapidly fell to a level well below the 50 neutral mark at 38. Moreover, looking at the stochastics, the %K line dipped below the slow %D line and entered into bearish territory. Notice though that %K is currently in oversold territory, rendering a near-term reversal possible as well.

The 50% Fibonacci retracement level at 1.3250 (January 31 – March 9 upleg), which is roughly where the price opened today, might offer some intra-day resistance. Above this, a barrier might be formed by the 50-day MA at 1.3295 and the 38.2% Fibonacci level at 1.3317. Further up, another Fibonacci mark which is also a potential psychological point, namely the 1.34 handle, could offer additional resistance.

The 200-day MA at 1.3226 could offer some support to the downside. Note that the pair briefly fell below it in today’s trading but then climbed back above. If this fails to hold, the 61.8% Fibonacci at 1.3183 might offer additional support. A break below would shift the focus to the 1.31 handle, a potential psychological level which also coincides with a congested area in the recent past.

Regarding the medium-term outlook, prices appear to have been consolidating in recent months for a neutral picture further ahead.

Summing up, the short-term bias is bearish and the medium-term is neutral.

 

Sourcewww.xm.com

Read 186 times Last modified on Thursday, 13 April 2017 11:32

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