USD/CAD is currently experiencing a correction within a downtrend, with the RSI indicator showing oversold conditions. If the RSI exits the oversold zone, it could signal a higher correction is in progress. The medium and short-term trends are bearish, suggesting more downside potential.
The RSI momentum indicator is currently in the oversold zone, but if it moves back into neutral territory on a 4-hour closing basis, it could indicate a buy signal for an extended correction higher. This correction is likely to reach the trendline before resuming the downtrend.
USD/CAD 4-hour Chart
Once the pullback concludes, the downtrend is expected to continue, potentially pushing the pair lower. A break below 1.3441 would provide additional bearish confirmation, with targets at 1.3380 and 1.3222. However, a close above 1.3520 could suggest a reversal is on the horizon, with a break above 1.3593 providing a stronger signal.
Analysis: The USD/CAD pair is currently undergoing a correction within a downtrend, with the potential for a higher correction if the RSI indicator exits the oversold zone. Traders should monitor the RSI for signs of a buy signal and watch for key support levels at 1.3441, 1.3380, and 1.3222. A break above 1.3520 could indicate a possible reversal in the trend. Stay informed and trade wisely.