The Loonie has denied for further gains and took a bearish reversal from 1.29532 and our exponential moving average 200 in weekly time frame, creating dark cloud cover on intraday time frame (weekly chart).  Dovish risk dominated USDCA on Thursday, as a result, the US Dollar declined by 90 pips or 0.72% against the Canadian Dollar during Thursday's trading session. Given that the exchange rate has breached the 1.2580 support level, sellers are likely to continue to drive the price lower during the following trading session. The potential target for bearish traders will be near the 1.2500 area. USDCAD is trading above intraday exponential moving averages 8, 13 and 21 on weekly time frame but has broken below our lower trend line to the bullish channel, entering into the ichimoku cloud. The US dollar languished near one-month lows amid expectations that the Fed will wait for a longer period before rolling back its massive pandemic-era stimulus. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

That said, the upward trajectory from the June low of 1.2006 is still valid despite the depreciation in the past two weeks and only an aggressive selling below the previous low of 1.2421 would disprove it, consequently shifting the spotlight towards the 1.2300 level – being the 61.8% Fibonacci retracement of the latest upleg. The USD/CAD pair dropped three-week lows, around the 1.2540 region during the early European session, with bears now awaiting a sustained break below the very important 200-day SMA. Moreover, doubts about the US labour market recovery has further dampened prospects for an early lift-off. This turned out to be key factors that continued weighing on the greenback and acted as a headwind for the USD/CAD pair.

USDCAD

Sep 03 2021

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