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USDCAD looks for buyers near 1.2440; bears could dominate

By XM Group (Trading Point )ForexJul 30, 2021 05:30AM ET
www.investing.com/analysis/usdcad-looks-for-buyers-near-12440-bears-could-dominate-200594843
USDCAD looks for buyers near 1.2440; bears could dominate
By XM Group (Trading Point )   |  Jul 30, 2021 05:30AM ET
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USDCAD retreated below the short-term supportive trendline and to a two-week low of 1.2431 on Thursday following the multiple rejections from the 200-day simple moving average (SMA).

The current consolidation area around 1.2440 overlaps with July 9-13’s support region and the 200-period SMA on the four-hour chart. Hence, it could be an ideal pivot point as the Stochastics sink in the oversold territory. Yet, with the price trading some distance away from the lower Bollinger band, the RSI set to explore the bearish zone, and the MACD strengthening its negative momentum below its red signal line, the bears could rule the roost afterall.

If the bearish scenario unfolds, the pair may dip to meet fresh demand near the lower Bollinger band and the 50-day SMA at 1.2330. The surface of the Ichimoku cloud is also located in the same neighborhood, adding extra importance to the region. Breaking that floor too, the former support area around 1.2270 may attempt to catch the fall before the focus turns to the 1.2200 – 1.2130 restrictive zone, and the broken long-term descending trendline.

Should the 1.2440 base stand firm, the price could push for a close above the 20-day SMA (middle Bollinger band) and the short-term trendline around 1.2545. The 200-day SMA is also converging to the same location, while the 23.6% Fibonacci retracement of the 1.4667 – 1.2012 downleg is within breathing distance at 1.2634. Therefore, stronger buying pressures will be needed to knock that wall and bring the 1.2738 resistance and the 1.2800 peak back into view. Beyond the latter, the bulls could pin a new higher high around 1.2880.

As regards the market trend, the bullish cross between the 20- and 50-day SMAs is still defending the upward move from the four-month low of 1.2012. A potential bullish intersection between the 20- and 200-day SMAs could further enhance trend optimism.

Summarizing, USDCAD is expected to trade bearish in the short-term, though the pair could find some footing around 1.2440 before heading lower again.


USDCAD_daily_30_07
USDCAD_daily_30_07
USDCAD looks for buyers near 1.2440; bears could dominate
 

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USDCAD looks for buyers near 1.2440; bears could dominate

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Altho Njovu
Altho Njovu Aug 01, 2021 5:29AM ET
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That was an awesome analysis, I agree and think that the market will BUY to around 1.25757 where new Sellers will seek to kick in.
 
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