Canadian Dollar Forecast: USD/CAD Slump Pushes RSI into Oversold Zone
USD/CAD extends the slump from earlier this week to push the Relative Strength Index (RSI) into oversold territory.
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Canadian Dollar Outlook: USD/CAD
USD/CAD extends the slump from earlier this week to push the Relative Strength Index (RSI) into oversold territory, and the exchange rate may continue to give back the advance from the October low (1.3473) as it carves a series of lower highs and lows.
Canadian Dollar Forecast: USD/CAD Slump Pushes RSI into Oversold Zone
Keep in mind, USD/CAD broke below the opening range for June after failing to retrace the decline from the start of the month, and the exchange rate may track the negative slope in the 50-Day SMA (1.3847) as it holds below the moving average.
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As a result, USD/CAD may continue to register fresh yearly lows should the bearish price series persist, and the move below 30 in the RSI is likely to be accompanied by a further decline in the exchange rate like the price action from last year.
With that said, USD/CAD may struggle to retain the rebound from the October low (1.3473) as it falls to a fresh yearly low (1.3567), but the exchange rate may consolidate ahead of the Federal Reserve interest rate decision on June 18 as the central bank is scheduled to update the Summary of Economic Projections (SEP).
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CAD Price on TradingView
- USD/CAD extends the series of lower highs and lows from earlier this week to register a fresh yearly low (1.3567), with a break/close below the 1.3510 (50% Fibonacci extension) to 1.3520 (23.6% Fibonacci extension) region opening up the October low (1.3473).
- Failure to defend the September low (1.3420) may lead to a test of 1.3380 (61.8% Fibonacci extension), but lack of momentum to break/close below the 1.3510 (50% Fibonacci extension) to 1.3520 (23.6% Fibonacci extension) region may curb the recent slump in USD/CAD.
- Need a move/close back above 1.3630 (38.2% Fibonacci extension) to bring the 1.3700 (38.2% Fibonacci extension) to 1.3710 (78.6% Fibonacci retracement) zone back on the radar, with the next area of interest coming in around 1.3780 (23.6% Fibonacci extension).
Additional Market Outlooks
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--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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