As the world’s top investment manager and financial market journalist, I bring you the latest analysis on USD/CAD’s current trend. While the pair is showing bullish signs, it still lacks the momentum needed to confirm a full reversal from the bearish trend.
To indicate a shift in the dominant bear trend, USD/CAD would need to rise more strongly and break above key resistance levels. Until then, the risks remain tilted to the downside, with a potential downtrend extension towards 1.3380 if the 1.3440 support is breached.
USD/CAD Daily Chart Analysis
Recent price action on the USD/CAD daily chart shows a Two-Bar reversal pattern at the August 27 and 28 lows, signaling a short-term bullish reversal. Additionally, the pair has broken above a key trendline and the RSI indicator has moved out of oversold territory, further supporting the case for a potential trend reversal.
For a confirmed bullish reversal, a close above 1.3520-25 is crucial, which could open the door for a move towards 1.3593. Breaking above this level would provide a stronger signal of trend reversal. However, the current recovery has been slow and weak, leaving room for the bear trend to resume if the pair fails to sustain above key resistance levels.
In the event of a reversal failure, a move back below the trendline would indicate renewed weakness, with downside targets at 1.3380 and 1.3222.
Analysis Breakdown:
- USD/CAD is displaying bullish signs but lacks momentum for a confirmed reversal.
- Risks remain tilted to the downside, with potential downside targets if key support is breached.
- Recent price action shows a Two-Bar reversal pattern and a break above a trendline, suggesting a potential bullish reversal.
- Confirmation of a bullish reversal requires a close above 1.3520-25, with upside targets at 1.3593 and beyond.
- A failure to sustain above key resistance levels could lead to a resumption of the bear trend, with downside targets at 1.3380 and 1.3222.