Technical Analysis – USDCAD retreats to 9-month low, confirming bearish breakout
USDCAD has been in a steady downtrend since late May, generating a clear structure of lower highs and lower lows. Moreover, the technical picture deteriorated even further when the price broke below the base of the symmetrical triangle pattern, which triggered a massive decline towards a fresh 9-month low of 1.3137.
The momentum indicators currently suggest that near-term risks are tilted to the downside. Specifically, the RSI bounced off the oversold zone but remains deep in the negative territory, while the MACD is holding below both zero and its red signal line.
Should the bears try to push the price lower, initial support could be met at the recent 9-month low of 1.3137. Piercing that wall, the pair could dive towards 1.3074 or lower to challenge the September 2022 bottom of 1.2960. Further declines could then come to a halt at the August 2022 low of 1.2727.
On the flipside, if the price reverses to the upside, a bunch of previous support levels could serve as resistance in the future. More precisely, the pair could advance towards the November 2022 support of 1.3225 before the February low of 1.3262 gets tested. Even higher, the May support of 1.3319 may curb any upside attempts.
In brief, USDCAD has been on a steep decline after breaking below the base of its recent triangle pattern. Moving forward, traders could shift their attention towards the 1.3000 psychological mark.
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