- USD/CAD is declining within a large range.
- The Loonie will probably fall to the range lows or an interim target.
- The RSI is oversold indicating a risk of a reaction, although no signal has been given yet.
USD/CAD is currently declining within a long-term range which has a ceiling in the 1.39s and a floor in the 1.31-1.32s.
The pair is unfolding a down leg within this range as the US Dollar (USD) weakens. Both the medium and short-term trends are now bearish, which given “the trend is your friend” favors short positions over longs.
USD/CAD Daily Chart
The pair is likely to continue falling in line with the trend, with an eventual target, most probably, at the range floor, starting at 1.3220.
An interim target is also situated at 1.3380 composed of swing lows in October 2023 and January 2024.
The Relative Strength Index (RSI) momentum indicator is in the oversold region indicating a risk of a pull back. However, a buy signal is not said to be given until RSI exits oversold and re-enters the neutral territory (on a closing basis) – which has not yet happened.
Given the oversold state of the RSI, however, traders are advised not to add to their existing short positions. Nor should they close them either, since RSI can remain oversold for a long time during downtrends whilst price continues making lower lows.
There is no sign from price that it is about to pull back as the chart keeps printing one red bar after another.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
