Refreshes two-month low near 1.2550, further downside likely

  • USD/CAD takes offered to renew multi-day bottom, drops for the second consecutive day.
  • Clear downside break of 100-DMA, bearish MACD signals favor sellers to aim for 200-DMA.
  • 38.2% Fibonacci retracement guards immediate upside, ascending trend line from June adds to the downside filters.

USD/CAD stands on slippery grounds near 1.2553, down 0.20% intraday, heading into Wednesday’s European session.

In doing so, the loonie pair extends the previous day’s 100-DMA breakdown to drop to the fresh low since November 17.

Other than the clear downside break of the 100-DMA, bearish MACD signals also favor USD/CAD bears to aim for the 200-DMA support level of 1.2500.

However, 50% Fibonacci retracement (Fibo.) of June-December 2021 upside, around 1.2485, will precede an upward sloping support line from June, close to 1.2450, to challenge the Loonie pair’s further downside.

Alternatively, 38.2% Fibo. restricts the quote’s nearby advances close to the 1.2600 threshold, a break of which will redirect the USD/CAD prices towards the 100-DMA level of 1.2627.

It’s worth noting that the 23.6% Fibonacci retracement and a descending resistance line from December 20, respectively around 1.2740 and 1.2770, will challenge the USD/CAD bulls past the 100-DMA.

USD/CAD: Daily chart

Trend: Further downside expected

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