USDCAD Maintaining Itself Above 23.6% Fib

Launch Chart
farhan fazal
USDCAD
·
Oct 31 2021
snapshot
MARKET FORECAST :

The USD/CAD climbs during the New York session, up 0.41%, trading at 1.2396 at the time of writing. Broad US dollar strength across the board keeps the Loonie under pressure. Also, weak Apple and Amazon Q3 corporate earnings and both companies CEO commenting about supply shortages and higher costs dented the market sentiment. Furthermore, concerns about inflation and central bank tightening conditions added to the abovementioned factors. Apart from this, a fresh leg down in crude oil prices undermined the commodity-linked loonie, which was seen as another factor that provided a goodish lift to the USD/CAD pair. It will now be interesting to see if the pair is able to capitalize on the move and confirm a near-term bullish breakout through a downward sloping channel extending from September swing highs.

MARKET FORECAST :

Earlier in the day, the Loonie appreciated against the greenback, maintaining the pair around 1.2329, near the lows of Thursday. However, month-end flows, and US Dollar demand, weakened the oil-linked Canadian dollar.
The USD/CAD pair is testing the top of a bearish flag, around 1.2400, which also confluences with a downslope trendline traveling from September 20 high towards September 29 high that the pair is testing at press time. Nevertheless, to resume the downward trend, as confirmed by the daily moving averages (DMA's) above the spot price and the Relative Strength Index (RSI) at 41, it will need a daily close below the bottom of the bearish flag. Therefore, due to US dollar strength at Friday's session, it seems the pair is under a mild correction before resuming the downward trend, as signaled by the moving averages and the RSI.