- USDCAD stalled this week’s recovery move near an ascending trend-line support breakpoint.
- The technical set-up favours bearish traders and supports prospects for additional weakness.
- Sellers could look to enter around 1.3125-30 region and place stop-loss near the 1.3200 handle.
In this week’s #ThrowbackThursday we will revisit our recent bearish view for USDCAD. As was anticipated, the pair extended its downward trajectory and broke through a short-term ascending trend-line support near the 1.3100 handle. The subsequent selling pressure dragged the pair to its lowest level since October 2018 earlier this week. Since then, the pair has been recovering on the back of some USD buying, though the uptick faltered near the mentioned support breakpoint.
The pair’s inability to move back above a support-turned-resistance and the lack of any strong follow-through buying suggests that the near-term bearish trend might be far from over. The negative outlook is further reinforced by the fact that technical indicators on the daily chart maintained their bearish bias and are still far from being in the oversold territory. Hence, any attempted positive move beyond the 1.3100 handle runs the risk of fizzling out rather quickly.
Bearish traders could look to enter near the 1.3125-30 region and place stop-loss near the 1.3200 mark. The pair seems vulnerable to retest the key 1.3000 psychological mark before eventually falling to this week’s swing lows, around the 1.2930-25 region.