USDCAD’s recent price action indicates continued weakness. This analysis examines the technical situation and explores potential scenarios for the currency pair.

USDCAD Stuck in Downtrend:

  • Falling Trend Line Resistance: A key technical indicator for USDCAD is the falling trend line on the 4-hour chart. As long as the price remains below this trend line, the downtrend that began at 1.3845 is likely to continue.
     

    • Downside Trajectory in Focus:

  • Lower Targets in Sight: If the downtrend persists, the next potential target zones to watch could be at 1.3650, followed by a deeper decline towards 1.3600.
     

    • Signs of a Reversal?

  • 1.3720 Initial Resistance: While the immediate outlook remains bearish, there’s a potential sign of a short-term correction. A break above the initial resistance level at 1.3720 could indicate such a correction.
  • Limited Upside Potential in Correction: However, even if the price breaks above 1.3720, it is likely to encounter resistance again at the falling trend line.
     

    • Trend Reversal or False Hope?

  • Trend Line Breakout as Bullish Signal: A decisive break above the falling trend line resistance would be the most significant development. This move could signal a completion of the downtrend.
  • Upside Target If Downtrend Ends: If the downtrend reverses, another rise towards the previous high of 1.3845 could be seen.
     

    • Overall Sentiment:The technical outlook for USDCAD remains bearish in the short term. The price action below the falling trend line suggests a continuation of the downtrend. However, a break above the initial resistance at 1.3720 could indicate a temporary correction. Only a breakout above the trend line itself would suggest a potential trend reversal. Close monitoring of price action around these key levels will be crucial in determining the future direction of USDCAD.More By This Author:GBPUSD Under Pressure: Downtrend Confirmed Or Correction Incoming?
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