USD/CAD Analysis Report: Buyers can return till 1.3340 is broken, and an inverted hammer challenges the bearish sentiment.

Nov 08, 2022

VOT Research Desk

During early Tuesday morning in Europe, the USDCAD extends its week-start comeback to 1.3510. In doing so, the Loonie pair validates the previous day’s bullish inverted hammer candlestick while prodding the 50-DMA.

However, the Loonie pair’s continuous break of a one-month-old horizontal level near 1.3500 during the last week, along with the negative MACD indications, suggests the quote’s underlying weakness in momentum.

As a result, the recent rebound appears elusive unless the quote provides a daily closing above the 50-day moving average (DMA) of 1.3515.

After that, a steady rise toward s1.3610 and 1.3720 cannot be ruled out. However, several resistance levels around 1.3840-50 might test the USDCAD bulls later on.

Meanwhile, new sellers should wait for the quotation to break below the previous swing low, which is around 1.3465.

Following that, a confluence of the 50% Fibonacci retracement level of the pair’s August-October upside and a three-month-old ascending support line, centred around 1.3350-40, will be essential for USDCAD bearish to watch.

A daily close below 1.3340 raises the possibility of a drop into the early September highs above 1.3210. The 61.8% Fibonacci retracement level, often known as the golden ratio, adds power to the mentioned support.