Forex world

December 08, 2022

USD/CAD stays defensive above 50-SMA support

- USD/CAD licks its wounds after the biggest daily loss in over a week.

- 50-DMA restricts immediate downside but bearish Doji candlestick, seven-week-old resistance line probe bulls.

- Ascending trend line from mid-November puts a strong floor under the prices.

USD/CAD seesaws around 1.3600 as bearish take a breather during early Friday morning in Asia, after the heaviest slump in eight days.

The Loonie pair’s previous fall could be linked to the bearish Doji candlestick, as well as the U-turn from the seven-week-old downward-sloping resistance line.

However, the bullish MACD signals and the 50-DMA level surrounding 1.3560 challenge the quote’s immediate downside.

In a case where the USD/CAD bears manage to conquer the 50-DMA support, the 38.2% Fibonacci retracement level of the pair’s August-October upside, near 1.3500 threshold, will be on their radars.

Even so, the pair buyers remain hopeful unless witnessing a clear downside break of an ascending support line from the mid-November, at 1.3430 by the press time.

Meanwhile, recovery moves not only need to cross the aforementioned nearby resistance line figures of 1.3665 but also cross the stated Doji’s top of 1.3700 to convince USD/CAD buyers.

Following that, a quick run-up towards the previous monthly peak surrounding 1.3810 can’t be ruled out.

Though, multiple levels surrounding 1.3850 and 1.3900 can test the USD/CAD bulls afterward, before directing them to the yearly high marked in October near 1.3980.

Trend: Limited downside expected

USD/CAD: Daily chart

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