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Bearish Momentum Sends USD/CAD Tumbling Through the Consolidation Zone

Bearish Momentum Sends USD/CAD Tumbling Through the Consolidation Zone

2019-06-07 09:00:00
Mahmoud Alkudsi, Market Analyst
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USD/CAD Price Outlook, Charts and Analysis

  • All eyes on NFP data release today for US Dollar.
  • USD/CAD shows more signs of weakness.

Did we get it right with our US Dollar forecast? Find out more for free from ourQ2 USD and main currencies forecasts

Join our analyst Christopher Vecchio as he covers US NFP Data release and its impact on the markets in our live webinar at 12:15 GMT.

USD/CAD – Breaks Below the Congestion Area

On June 5, USD/CAD resumed its bearish price action testing the lower end of the wide trading range (1.3377 – 1.3517). However, the bears succeeded in their second attempt on the following day to force a close below 1.3377.

The relative Strength Indicator (RSI) remained below 50 highlighting the bearishness outlook of USD/CAD.

Having trouble with your trading strategy?Here’s the #1 Mistake That Traders Make

USD/CAD DAILY PRICE CHART (Jan 25, 2019 – JUN 7, 2019) Zoomed In

USD/CAD price daily chart 07-06-19 Zoomed in

USD/CAD DAILY PRICE CHART (MAR 2, 2018 – JUN 7, 2019) Zoomed Out

Bearish Momentum Sends USD/CAD Tumbling Through the Consolidation Zone

Looking at the daily chart we notice today that USD/CAD has tested the May 22 low at 1.3357 eying the April 11 Low at 1.3335. If the bears continued selling the pair could fall towards 1.3286.

A further bearishness sentiment may send the price towards 1.3218. Weekly Supports at 1.3274 the April 17 Low and 1.3250 the March 19 low must be watched.

On the other hand, a close above 1.3377 would return USD/CAD to its old trading range mentioned above. Daily resistance levels at 1.3410 and 1.3457 need to be in focus.

Just getting started?See our Beginners’ Guide for FX traders

USD/CAD Four-HOUR PRICE CHART (April 10, 2019- JUN 7, 2019 )

USD/CAD price 4H Chart 07-06-19

Looking at the four-hour chart, today the price printed its lowest level in nearly seven weeks at 1.3346. Any bearishness below the April 22 Low at 1.3335 may lead the price to swing lower towards 1.3286. However, weekly and daily supports at 1.3317 and 1.3306 are worth monitoring.

On the flipside, a break above 1.3377 could start a rally towards 1.3410. Daily resistance at 1.3400 needs to be considered.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

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