USD/CAD plummets to 8½-month lows; negative bias remains.
USD/CAD is plunging today towards a fresh eight-and-a-half month low near 1.3030, following the pullback on the 1.3145 resistance level, which overlaps with the 20-day SMA.
Technically, the RSI indicator is declining in negative territory, approaching the oversold zone, while the stochastic oscillator posted a bearish crossover within the %K and %D lines in the middle of the 20 and 80 level, strengthening its bearish view on price.
Should prices tumble below Friday’s trough, support could be found around the 50.0% Fibonacci retracement level of the up-leg from 1.2250 to 1.3664 near 1.2955. If there is a leg below that level, the market could meet the 1.2910 support, taken from the low on October 2018, before the focus shifts to the 61.8% Fibonacci of 1.2790.
However, if the market manages to pick up speed on the upside the 38.2% Fibo of 1.3120 could offer a nearby obstacle ahead of the 20-SMA currently at 1.3145. A significant-close above the latter would push the price until the 1.3240 level, identified by the inside swing bottom on June 10.
Concluding, in the near-term, the bias remains negative since the price holds well below the moving averages and posts lower lows and lower highs. However, in the bigger view, USD/CAD is still developing in an ascending movement. If there is a drop beneath the 61.8% Fibonacci, this would shift the outlook to bearish.
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