USD/CAD prepares for more losses after breaking through support

USD/CAD Technical Outlook:

  • USD/CAD broke below confluence support near the 1.2600 area, which is a bearish signal for price action
  • The broader outlook remains bearish
  • From a fundamental point of view, the Canadian dollar maintains a constructive picture

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at the beginning of the weekI argued that the USD/CAD could head lower and break out of the confluence support near the 1.2600 region if risk sentiment remains positive. Over the past few days, the market mood has been more stable and less panicked, so the bearish thesis well played As shown in the daily chart below. After the breakout, there was some brief congestion, but the consolidation appears to be heading to the downside, with the exchange rate drifting towards 1.2515 at the time of writing.

In general, the short-term outlook remains skewed Downand will remain as long as the husband supports last hack and Remains Below the 200-day simple moving average, it is a useful trend indicator. If this scenario incarnatesellers can regain decisive control of the market, paving the way for the next bottom line, in which case, focus will shift lowest to its lowest in January near 1.2450.

Traders in the case of a bullish reversal should Watch how prices react around the 1.2600 area, Which is now the most pressing technical resistance to consider. if The The bulls managed to convincingly cross this hurdle, USD/CAD could make progress and challenge the 50-day simple moving average located in 1.2690. For more strength, we cannot exclude the attack on 1.2800.

From a basic point of view, the Canadian dollar looks attractive against the dollar. The Bank of Canada has pledged to withdraw Stimulus Strongly to contain inflation, the country Strong labor market and improved terms of trade Driven by rising oil prices everyone bullish catalysts. Although the war between Russia and Ukraine is a wild card and could unexpectedly hit riskier currencies, we haven’t seen a major escalation in recent days. He said that, IAnd the crisis deterioratethe chromaticity can remain supported.

USD/CAD Technical Chart

USD/CAD chart was created using TradingView

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— Written by Diego Coleman, Contributor

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