USD/CAD Plummets: What’s Next for the Dollar-Loonie Pair?

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ForexInflux
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USD/CAD has fallen sharply from a high of 1.3946 to a low of 1.2703.

Technical Analysis: What the Charts Tell Us

Looking at the 4-hour chart, we can see a clear falling trend line. This line is crucial for understanding the pair’s potential next moves.

Bearish Scenario: Further Downside Possible

  • As long as USD/CAD stays below the falling trend line, we could see more downward movement.
  • The next targets for bears could be:
    1. 1.3670 area
    2. 1.3640 area (if the first target is reached)

Potential Bullish Reversal While the current trend is downward, there’s always the possibility of a reversal. Here’s what to watch for:

  1. Key Level: Falling Trend Line
    • A break above this trend line could signal a potential reversal.
  2. Resistance Levels:
    • 1.3765: This is the first hurdle for any potential recovery.
    • 1.3800: If 1.3765 breaks, this could be the next target for bulls.

What Traders Should Look For

  1. Continued Weakness: If USD/CAD remains below the trend line, look for potential shorting opportunities with targets near 1.3670 and 1.3640.
  2. Potential Reversal Signs:
    • Watch for a break above the falling trend line.
    • A move above 1.3765 could confirm the reversal and potentially lead to a test of 1.3800.

Key Takeaways

  1. The overall trend for USD/CAD is currently downward.
  2. 1.3670 and 1.3640 are the next potential targets if the weakness continues.
  3. Keep a close eye on how the pair behaves around the falling trend line for any signs of a reversal.

Remember, forex markets can change quickly. Always use proper risk management and stay informed about economic events that could impact currency movements, especially those affecting both the US and Canadian economies.

We’ll continue to monitor USD/CAD and provide updates as the situation evolves. Happy trading!