The USD/CAD pair is currently trading at 1.37437, following a recent decline from the 1.3800+ region. The pair showed strong bullish momentum toward the end of July but is now exhibiting signs of short-term weakness as it dips below the 9-period SMA.
📉 Price Action Summary:
- Early July to Mid-July: Price ranged sideways between 1.3650–1.3750, with occasional bullish spikes.
- Late July: A strong bullish breakout occurred around July 26, pushing the pair toward the 1.3850 zone.
- August Shift: After forming a peak above 1.3850, a clear downward movement has developed, breaking below the 9 SMA, indicating short-term bearish pressure.
📊 Technical Insights:
- The SMA 9 is acting as dynamic resistance, with price candles consistently closing below it.
- Support zone appears to be forming near 1.3720–1.3700, where price may either consolidate or look to bounce.
- The recent lower highs and lower lows pattern supports the bearish bias in the short term.
🔄 Key Levels to Watch:
- Resistance: 1.3780 – Minor intraday resistance where price previously struggled.
- Support: 1.3700 – A psychological and technical support level.
- Breakout Watch: A clean break below 1.3700 could open the door to a drop toward 1.3660 or even 1.3600.
📌 Trading Outlook:
- Bearish bias favored below 1.3780, especially if price continues to respect the SMA resistance.
- Cautious long positions can be considered only if the pair reclaims 1.3800 with strong volume and bullish momentum.
🧠 Conclusion:
The USD/CAD pair is showing signs of weakness after a strong rally, with sellers regaining control in early August. Traders should monitor the 1.3700 zone closely – a bounce could lead to short-term recovery, while a breakdown may signal a deeper correction.
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