US Dollar versus Canadian Dollar went exactly in accordance to our analysis published on 21st Sept, anticipating that the pair will fail to break above the daily high 1.2940 and reverse the gains by adapting to dovish stance after providing us with a closing below 38.2% fibo level at 1.2850 price action. On Friday, the US Dollar declined by 86 pips or 0.68% against the Canadian Dollar. The 200– hour simple moving average pressured the currency pair lower during Friday's trading session. Technical indicators suggest selling signals on the 4H time-frame chart. Most likely, sellers might continue to pressure the exchange rate lower during the following trading session. Worries about potential risks from the debt crisis at China Evergrande Group resurfaced after a deadline for paying $83.5 million in bond interest passed without any remarks from the company.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

From a technical perspective, sustained weakness below the 1.2600 mark would turn the pair vulnerable to challenge the very important 200-day SMA, currently around the 1.2520 region. This is closely followed by the key 1.2500 psychological mark, which if broken decisively will confirm a near-term bearish breakdown. The next relevant support is pegged near the 1.2430-25 region ahead of the 1.2400 mark. The downward trajectory could further get extended towards the 1.2310-1.2300 support with some intermediate support near the 1.2370-65 region.

On the flip side, the 1.2700 round-figure mark now seems to act as immediate strong resistance. Any subsequent move up might confront some hurdle near Friday's wing high, around the 1.2730 region, and the 1.2750-55 supply zone. A sustained move beyond now seems to pave the way for additional gains and lift the pair to the 1.2800 mark. Some follow-through buying beyond the 1.2825-30 region should allow bulls to aim back to conquer the 1.2900 round figure.

USDCAD

Sep 27 2021