USDCAD Slowly Heading Towards Long Term Trend Line Support
There has been a massive decline in the USDCAD pair after it hit the critical resistance level at 1.3788.From that level, the green bucks have been suffering hard against the loonie. Most of the leading investors in the global market short the USDCAD pair after breached the medium term trend line support at the 1.3433 level on the daily chart. Though the pair tried to continue its bullish momentum by exhibiting bullish engulfing pattern near the trend line support the ongoing weak performance of the U.S dollar help the USDCAD Bulls to win the race.
Let’s see the technical analysis of the USDCAD pair
Figure: Technical analysis of USDCAD daily chart
From the above figure, you can clearly see a failed bullish engulfing pattern near the medium term bullish trend line. Since the critical support level at 1.3433 is breached we are most likely to see a retest of the long-term bullish trend line in the daily chart. Most of the professional traders are cautiously waiting for a bullish price action signal near the long term trend line support to zone to execute the long orders in the market. If the critical support level at 1.3170 manages to restrict the bearish momentum of this pair then we will see another strong rally in the USDCAD pair near future. However, a daily closing of the price below the critical support level at the 1.3170 level will ultimately lead this pair towards the next critical support level at 1.2765.This level is going to provide a significant amount of bullish pressure to the pair as plenty of support lies below that level.
USDCAD weekly chart analysis
Figure: USDCAD weekly chart analysis
In the weekly chart, we have strong horizontal support level and the pair will have a tough time to breach the key support level at 1.3191.In the upcoming days, we might see an imminent fall in the USDCAD pair towards the horizontal support level at 1.3191.From that level, we might see a ranging movement in the market until the FED release their financial statement regarding their rate hike decision. Considering the weekly chart support level at 1.3191 levels we can expect some bearish false spike in the market to wipe out the early long orders. However, a clear break of this critical support level will confirm the newly establishment of the bearish trend on the weekly chart.
Summary: Considering all the parameters we are still expecting some bearish movement in the USDCAD pair towards the daily long term trend line support level. We will wait for bullish price action confirmation signal on the daily chart to execute our long orders near the 1.3191 zone.