Wednesday, April 1, 2020
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USD/CAD remains above the supportive falling trend line

USD/CAD has found a strong support area near the penetrated descending trend line and the 38.2% Fibonacci retracement level of the bearish move from 1.3664 to 1.2950 around 1.3220.

In the short-term, the outlook seems to turn slightly bullish after the jump towards the 1.3325 resistance and the momentum indicators are holding in the bullish area. The stochastic oscillator completed a positive cross in the oversold zone, while the Relative Strength Index (RSI) is moving sideways after the bounce on the 50-neutral threshold.

If price action remains above 1.3220 (immediate support), there is scope to test the 50.0% Fibonacci of 1.3305. Clearing this key level would see additional gains towards the 1.3325 – 1.3350 zone which has been rejected a few times in the past. Rising above it would see prices re-test the 61.8% Fibo of 1.3390 and then from this level and above, there would be a signal for bullish structure.

In the wake of negative pressures, the market could meet support at the 40-day simple moving average (SMA) currently at 1.3143 before it heads lower to the 23.6% Fibo of 1.3120. A successful close below this level could see a retest of the 1.3100 psychological level, while in case of steeper declines, the pair could breach this barrier, diving to the 21-month bottom of 1.2950.

In the short term, the bullish outlook remains intact, with the moving averages all pointing upwards. However, should prices decline towards the 40-day SMA, this would risk shifting the medium-term picture to a negative one again.


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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


Source: XM

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