USDCAD Slides Below Support: Downward Spiral Or Short-Term Correction?

By Staff of ForexCycle

Thursday, March 7, 2024 7:45 PM EST

USDCAD has been on a downward path, breaching a key technical level and approaching another critical zone. This analysis explores the technical situation and potential future scenarios for the currency pair.

Breakdown Confirmed: Downtrend in Focus

Rising Trend Line Broken: USDCAD decisively fell below the rising trend line visible on the 4-hour chart. This trend line had previously provided support, and a break below it signifies a weakening of the uptrend and a shift in momentum towards the bears.
1.3440 Support Level in Sight: The pair is now facing the support level at 1.3440. A breakdown below this level could trigger further downside movement.

Potential Downside Targets:

1.3400 and 1.3360 Areas: If the bears manage to push USDCAD below 1.3440, potential downside targets include the 1.3400 area and even the 1.3360 area. This scenario would suggest a continuation of the downtrend.

Resistance to Watch: Potential for Rebound

1.3470 Initial Resistance: While the immediate outlook appears bearish, it’s important to acknowledge potential upside opportunities. The initial resistance level to watch is at 1.3470. A breakout above this level could indicate a short-term correction and a possible retest of the area around 1.3485.

Overall Sentiment:

The technical outlook for USDCAD has turned bearish following the breakdown below the rising trend line. The pair is currently facing the 1.3440 support level. A break below this level could indicate a steeper decline, while a bounce could signal a temporary pause in the downtrend. Monitoring price action around these key levels will be essential in determining the pair’s next move.

More By This Author:

USDCAD Slides Lower: Can The Bulls Find Support Or Face Deeper Decline?
EURUSD Breaks Resistance: Uptrend Gains Momentum, But Can It Hold?
EURGBP Stumbles: Uptrend Stalled Or Reversal In Sight?

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