USD/CAD Technical Outlook
- USD/CAD is overbought because it heads right into a degree from 2020
- Shares have but to capitulate, however we may even see a bounce develop round June lows
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USD/CAD Technical Outlook: On Reversal Alert within the Close to-term
USD/CAD has run almost 9 figures in two weeks with the greenback typically ripping and shares promoting off. The momentum the previous couple of classes is starting to point out indicators of faltering as overbought situations maintain the pair again.
There’s a significant degree to observe from 2020 simply above the in a single day excessive. The realm proper round 13850 had vital which means over a six week stretch throughout April and Might of 2020. It acted as a flooring as a descending wedge shaped earlier than value lastly broke laborious.
This makes that spot a vital one to observe as value will get prolonged into it. The greenback and shares might want to reverse course a bit for a significant reversal to occur, however the signposts are there for USD/CAD to return off from resistance.
Talking of shares, the S&P is buying and selling across the June lows and momentum is starting to reveals indicators of slowing, which might result in a bounce in shares. The pondering is that we haven’t but seen an actual low put in, however bounce threat round previous lows, even in a bear market, is excessive.
Weak spot might sink USD/CAD 2-300 pips shortly even when solely a pullback given the dimensions of the run with no retracement. Ideally, for this to arrange we see a spike into or above 13850 that fades off and posts a reversal candle.
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USD/CAD Day by day Chart
USD/CAD Chart by TradingView
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—Written by Paul Robinson, Market Analyst
You’ll be able to comply with Paul on Twitter at @PaulRobinsonFX
