The USD/CAD pair is currently on a downward trend within a well-defined range, with a ceiling around 1.39 and a floor between 1.31-1.32. This downward movement is fueled by a weakening US Dollar, leading to bearish trends in both the medium and short-term.
USD/CAD Daily Chart Analysis
According to expert analysis, the pair is expected to continue its decline towards the range floor at 1.3220, with an interim target at 1.3380. The Relative Strength Index (RSI) is currently in the oversold region, suggesting a potential pullback. However, a buy signal will only be confirmed when RSI exits oversold territory and enters a neutral zone.
Despite the oversold RSI, traders are advised to hold their short positions and refrain from adding or closing them prematurely. It is important to note that RSI can remain oversold for an extended period during downtrends, while price continues to decrease.
As the chart displays a consistent pattern of red bars, there are no indications of an imminent reversal in price movement.
Analysis Breakdown:
- USD/CAD pair is declining within a defined range.
- Short and medium-term trends are bearish, favoring short positions.
- Target price at range floor (1.3220) with interim target at 1.3380.
- RSI in oversold region, indicating a potential pullback.
- Traders advised to hold short positions despite oversold RSI.