Canadian Dollar Forecast: USD/CAD Vulnerable to Fresh Yearly Lows
USD/CAD may fall to fresh yearly lows should it fail to defend the rebound from the weekly low (1.3770).
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Canadian Dollar Outlook: USD/CAD
USD/CAD is little changed from the start of the week as it snaps the recent series of lower highs and lows, but the exchange rate may fall to fresh yearly lows should it fail to defend the rebound from the weekly low (1.3770).
Canadian Dollar Forecast: USD/CAD Vulnerable to Fresh Yearly Lows
Keep in mind, USD/CAD cracked the November low (1.3821) during the previous month on the back of US Dollar weakness, and the exchange rate may continue to give back the advance from the October low (1.3473) as it appears to be searching for support.
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As a result, a further decline in USD/CAD may push the Relative Strength Index (RSI) toward oversold territory, but the oscillator may show the bearish momentum abating should it continue to hold above 30.
With that said, USD/CAD may attempt to retrace the selloff from April should it defend the advance from the weekly low (1.3770), but the weakness in the exchange rate may persist as the 50-Day SMA (1.4173) establishes a negative slope.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CAD Price on TradingView
- USD/CAD is little changed from the start of the week as it bounces back from a fresh yearly low (1.3770), but another failed attempt to close above 1.3850 (50% Fibonacci extension) may push the exchange rate toward the 1.3700 (38.2% Fibonacci extension) to 1.3710 (78.6% Fibonacci retracement) region.
- Next area of interest comes in around 1.3630 (38.2% Fibonacci extension), with a break/close below 1.3520 (23.6% Fibonacci extension) opening up the October low (1.3473).
- At the same time, a close above 1.3850 (50% Fibonacci extension) may push USD/CAD back toward the 1.3940 (61.8% Fibonacci retracement) to 1.4000 (61.8% Fibonacci extension) zone with the next area of interest coming in around 1.4110 (50% Fibonacci retracement).
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--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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