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MTrading Team • 2023-09-19

USDCAD sellers need validation from 1.3430 and Canada inflation

USDCAD sellers need validation from 1.3430 and Canada inflation

USDCAD stays pressured at the lowest level in a month after breaking a six-week-old horizontal support. Adding strength to the downside bias is the Loonie pair’s sustained trading below the 200-SMA. However, the nearly oversold RSI (14) line and sluggish MACD signals prod the bears, which in turn highlights a two-month-old ascending support line, close to 1.3430 at the latest. It should be noted, however, that a downside break of the 1.3430 support will make the quote vulnerable to drop towards the 50% Fibonacci retracement of July-September upside, near 1.3390, and to the 61.8% Fibonacci ratio of 1.3320 ahead of directing the bears toward multiple tops marked in July and August around 1.3230.

Meanwhile, a horizontal area comprising multiple levels marked since early August, between 1.3490 and 1.3500, guards the immediate recovery of the USDCAD pair. Also acting as the nearby upside hurdles for the Loonie pair is a one-week-old descending trend line and 200-SMA, respectively near 1.3510 and 1.3530. It should be noted that the quote’s run-up beyond 1.3530 will aim for the 1.3600 and the double tops marked in late August around 1.3635-40. In a case where the bulls manage to keep the reins past 1.3640, the monthly high surrounding 1.3700 will be in the spotlight.

Overall, the USDCAD pair is likely to decline further but the downside room appears limited.

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