Forex world

March 23, 2023

USD/CAD reverses from a two-week-old resistance line

- USD/CAD holds lower ground near intraday bottom during the first loss-making day in three.

- Convergence of 21-EMA, horizontal resistance-turned-support from early January challenges sellers.

- Bearish MACD signals, downbeat RSI (14) suggests further downside of the Loonie pair towards monthly low.

USD/CAD reverses from a two-week-old resistance line to print the first daily loss in three around 1.3675 heading into Thursday’s European session. In doing so, the Loonie pair pokes a key support confluence comprising the 21-day Exponential Moving Average (EMA) and a horizontal line stretched from early January, the previous resistance.

Not only the failure to cross a short-term descending resistance line but bearish MACD signals and downward-sloping RSI (14) line, not oversold, also favors the Loonie pair sellers as they poke the 1.3660-65 support confluence.

Considering the aforementioned catalysts, the USD/CAD bears appear all-set to witness a near 100 pips of south-run on breaking the 1.3660 level, which in turn highlights the monthly low of 1.3555 that comprises the 50% Fibonacci retracement of the pair’s February-March upside.

During the quote’s weakness past 1.3555, the January 19 swing high and 61.8% Fibonacci retracement level, also known as the golden Fibonacci ratio, could challenge the USD/CAD bears around 1.3520 and 1.3490 in that order.

Meanwhile, recovery moves depend upon the Loonie pair’s ability to provide a daily closing beyond the aforementioned resistance line, close to 1.3725 by the press time.

Following that, the 1.3755-65 zone may act as an extra check towards the north before directing USD/CAD bulls to the monthly high of 1.3861.

USD/CAD: Daily chart

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