USDCAD Slides Lower: Can The Bulls Find Support Or Face Deeper Decline?

By Staff of ForexCycle

Wednesday, March 6, 2024 10:10 PM EST

USDCAD has recently dipped below key support levels, raising concerns about a potential trend reversal. This analysis explores the technical situation and potential future scenarios for the currency pair.

Breakdown from Support Levels:

1.3541 Support Breached: USDCAD decisively broke below the 1.3541 support level, which had been providing support earlier.
4-Hour Trend Line Tested: The pair is currently facing the support of the rising trend line on the 4-hour chart.

Potential Downside Scenarios:

Trend Line Support Breach: A breakthrough below the trend line support could signal a bearish continuation and trigger further downside movement. The next potential target in this scenario would be the 1.3440 support level.
1.3360 Area: A further decline below 1.3440 could see the pair aiming for the 1.3360 area. This would be a significant decline and could indicate a strong downtrend.

Upside Potential:

1.3550 Initial Resistance: While the immediate outlook is bearish, it’s important to acknowledge potential upside potential. The initial resistance level to watch is at 1.3550. A breakout above this level could indicate a short-term correction and potentially lead to a retest of the 1.3605 previous high resistance.

Overall Sentiment:

The technical outlook for USDCAD has turned bearish following the breakdown below the 1.3541 support level. The bulls need to defend the trend line support to prevent further downside. A break below this level could open the door for a deeper decline towards 1.3440 and potentially even 1.3360. Conversely, a rise above 1.3550 could signal a temporary pause in the downtrend. Monitoring the price action around these key levels will be crucial in determining the pair’s next move.

More By This Author:

EURUSD Breaks Resistance: Uptrend Gains Momentum, But Can It Hold?
EURGBP Stumbles: Uptrend Stalled Or Reversal In Sight?
USDJPY: Rebound or Reprieve? Uptrend At A Crossroads

Disclaimer: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only ...

Disclaimer: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

less

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.