USD/CAD is showing red candles below the key technical support area!
Are we looking for a breakthrough?
Or are the dollar bulls about to step in and say, “Not today, bears!”?
USD/CAD Daily Currency Pair Chart by TradingView
The US dollar fell sharply in August, helped by US data and comments from FOMC members that supported expectations of a Fed rate cut by September.
But at least some traders are now digesting weak U.S. economic reports and reading in “slower global growth” and lower risk appetite. The Canadian dollar in particular may struggle to find fresh upward momentum after Canada just posted cooler-than-expected and more moderate inflation figures in July.
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on the USD and CAD yet, it’s time to take a look at the economic calendar and stay up to date with the daily fundamental news!
Can USD/CAD maintain its downtrend long enough to force a bearish breakout?
The USD/CAD pair, which is already approaching the psychological level of 1.3600, is also testing the 200 simple moving average on the daily chart and the bottom of the range that has not been invalidated since April of this year.
If the USD/CAD pair sees more bearish candles below the 1.3600 level, the pair may attract enough sellers to drag it to the 1.3520 turning point of the S2 Pivot Point Line (1.3471).
But if the USD/CAD pair manages to form long bullish wicks and starts seeing green candles above the 1.3600 support level, the pair may attract buyers looking to buy the USD/CAD pair at cheaper prices.
The USD/CAD pair may see enough bullish pressure to retest the 1.3700 psychological level, or the 1.3750 mid-range area near the pivot point line.
Keep an eye on the latest market headlines so you don’t miss potential catalysts that could make or break the long-term range of the USD/CAD pair!