31.03.2023 03:59 PM
USD/CAD: upside reversal needs confirmation

The USD/CAD pair crashed in the last hours and it seems determined to reach and retest the near-term support levels before developing a new bullish momentum. After its massive drop, the price tries to rebound but the downside pressure remains high. It's trading at 1.3521 at the time of writing far below 1.3564 today's high.

Fundamentally, the CAD received a helping hand from the Canadian GDP which reported a 0.5% growth compared to the 0.4% growth estimated and after the 0.1% drop in the previous reporting period. On the other hand, the greenback took a hit from the US Core PCE Price Index. The indicator reported only a 0.3% growth versus the 0.4% growth estimated. Later, the US UoM Consumer Sentiment could bring more action.

USD/CAD Retesting The Buyers!

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Technically, the currency pair escaped from the down channel pattern signaling the leg down ended and that we may have a reversal. Still, the rate failed to stabilize above the weekly S2 (1.3550).

Now, the rate is almost to reach 1.3514 and the lower median line (lml). These are seen as downside obstacles.

USD/CAD Outlook!

Testing and retesting the lower median line (lml) and 1.3514, registering only false breakdowns may announce a new bullish momentum. Consolidation above these downside obstacles followed by a bullish closure above 1.3564 activates a new leg higher and brings new buying opportunities.

Ralph Shedler,
Analytical expert of InstaForex
© 2007-2023
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