CANADIAN DOLLAR TECHNICAL PRICE OUTLOOK: USD/CAD WEEKLY TRADE LEVELS
Canadian Dollar power in full view with USD/CAD close six-year-lows.
USD/CAD oversold on Weekly and demonstrating RSI divergence on Daily, can result in pullback themes towards lower-high resistance.
It was an ideal fundamental backdrop for USD/CAD bears over the past month. While USD/CAD was grinding resistance in a familiar Fibonacci level in late-April, the latest Bank of Canada rate decision saw the lender have a turn towards post-pandemic policy, which aided the Canadian Dollar to catch a strong bidding that remains in-play now. On the opposite side of the group, the US Dollar remains extremely feeble, aided along by last week’s FOMC minutes that highlight a Fed that appears nowhere near taking action, allowing for the potent blend of USD weakness and CAD strength so that the USD/CAD pair could plunge to fresh six-year-lows.
At this point, USD/CAD is holding over the emotional 1.2000 level with a very oversold RSI read in the weekly chart. This makes trend continuation prospects, at least in the current level, a more daunting prospect given just how stretched this move has become.
USD/CAD WEEKLY PRICE CHART
The tendency in USD/CAD remains powerful and clearly bearish. The bigger problem at this point is just one of positioning and timing, as the major pair remains very near a big level that, thus far, bears have been not able to overcome.
Joining that oversold RSI reading about the weekly chart above, the exact same index has started to diverge about the Daily graph, further hinting that a pullback might be nearing after an extremely aggressive expansion of the sell-off that has now spanned over a month.
This does not necessarily obviate the bearish tendency, but it does highlight the fact that sellers may want to be patient , searching for a pullback that may potentially allow for entry to bearish trend resumption strategies.
