At this point, a further fall is still in favor on the USD/CAD pair for support. The pair trading with 1.2867 resistance level intact has been rejected at this level and its outlook remains bearish. Breaking of the pair at the 1.2834 level will resume the medium term fall from current levels and will target next long term at the 1.2781 level. However, a firm break at the 1.2867 level will indicate trend reversal and will turn outlook bullish.
In the bigger picture, the current development suggests that the pair trading at the 1.2867 resistance level could not be taken out firmly as down trend as the form levels look to extend. There are various interpretations of the price actions. But in any case, the pair’s medium term outlook will stay bearish as long as the 1.2867 resistance level holds. A down trend in the pair could extend to the 1.2781 level. However, a further break of resistance will indicate that the USD/CAD pair has successfully defended again and will turn outlook bullish for new highs.
The dollar after the good run seems to break after the rally on pair seems to have exhausted and continues to slow down. The down days are seen by some bear candles specially the pin bar rejection at the resistance level. The pair struggles to make any headway and turns in effect into consolidation days. The current bearish candle was another indication where the bears come into picture again and bulls failed to make any sustainable impact, before once more resuming the decline in session to come. The pair’s daily momentum indicators have all now taken on a corrective outlook with the stochastic falling below the 80 level and the lines have crossed lower. The pair is back into the old pivot band so it will be interesting to see the reaction. The likelihood is that the support of this level which has often been seen as an inflection point will now be tested. The four hourly chart shows the resistance at the 1.2867 level is bolstered as a key level which was initially an area of near term overhead supply. The USD/CAD pair shows more sideways trading to settle near the resistance level and the price keeps its stability below this level. This keeps the negative pressure valid for the upcoming period. We keep waiting to test the pair reminding that breaking this level is required to confirm extending the bearish wave towards the 1.2834 followed by 1.2781 levels.
Therefore, we will continue to suggest the bearish trend for today unless we witness a clear breach and hold with a daily close above the 1.2867 level.
The pair’s expected trading range for today is between the 1.2781 support and 1.2867 resistance levels.
Expected trend for today: Bearish
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