The Loonie stands on a slippery ground while declining to 1.2598, down 0.18% intraday, during Monday’s Asian session. In doing so, the quote attacks the yearly bottom marked during January 21 as sellers cheer downside break of a short-term support line.
Poor December Retail Sales did no harm to the Canadian dollar while the retention of West Texas Intermediate above the $58.70 support and the failure of USD/CAD to finish beyond 1.2700 resistance any day this week, pointed the pair to its lowest close in almost three years on Friday.
Markets are also overlooking the lockdowns in Ontario and Quebec, the low vaccination numbers compared to those of the US and the UK, and the 2.8% drop in WTI from Wednesday.
The technical position of the USD/CAD is weak. Resistance levels are more numerous and recent, the eleven-month descending channel is intact and formidable and support depends on ranges traded more than three years ago
While 1.2589 offers immediate support, bearish MACD and an absence of oversold RSI directs USD/CAD sellers towards the fresh multi-month low during further downside.
In doing so, the April 2018 bottom near 1.2525 and the 1.2500 round-figure should gain the market’s attention.
On the contrary, an upside break beyond the previous support line, at 1.2615 now, can trigger fresh corrective pullback targeting the 1.2700 round-figure.
However, any further upside will have to cross a descending resistance line from February 08, currently around 1.2735, to convince the USD/CAD bulls.
We remain bearish with a possible rebound if the US fundamental factors are positive within the week.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.