HomeContributorsTechnical AnalysisTechnical Outlook: USDCAD - Corrective Rally Shows Initial Signs Of Stall

Technical Outlook: USDCAD – Corrective Rally Shows Initial Signs Of Stall

The USDCAD pair holds in red on Tuesday with upside attempts being limited at 1.2300 barrier. Fresh easing comes after Monday’s comments by

BOC Deputy Governor Lane, who said that BOC will pay close attention to the respond of the economy to strong Canadian dollar and higher interest rates.

Lane’s remarks resulted in lowered probability of rate hike in October, which fell to 38% from 44% before the statement.

CAD hit the lowest level in two weeks against the greenback in immediate reaction, but loonie’s losses look short-lived so far.

Correction of the downleg from 1.2662 to 1.2061 probed above its 38.2% retracement at 1.2290 but failed to close above it on Monday, after hitting high at 1.2337, where rally was capped by falling 20SMA.

Technical studies remain in strong bearish setup and keep focus at the downside. Current corrective action should be ideally capped at current levels, with return below 10SMA (1.2185) to confirm lower top and shift near-term focus lower.

Conversely, renewed strength above 20SMA (1.2334) would risk further upside extension. Next key barriers lay at 1.2419/32 (daily Kijun-sen / Fibo 61.8% of

1.2662/1.2061) and break here would signal extended corrective action.

Res: 1.2300, 1.2337, 1.2361, 1.2419
Sup: 1.2261, 1.2232, 1.2186, 1.2166

Windsor Brokers Ltd
Windsor Brokers Ltdhttp://www.windsorbrokers.com/
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.

Featured Analysis

Learn Forex Trading