USDCAD still in downtrend
This week we wrote about the Canadian dollar which has been rising against the American dollar for a year. This is mainly because of higher oil prices, as Canada is one of the largest oil exporters in the world. We showed the descending trendline on the USDCAD daily chart and warned that the trend could change once this trendline is broken.
Well, it has not happened yet. The trendline and the 50 moving average proved to be strong resistance against the bulls. The price fell back from this level and is approaching the previous low at 1.2465 (A).
Should the fall continue, it could send the course to a three year old support level around 1.2370 – 1.2250 (D weekly chart). If the oil prices retreated, that would cause a weakening loonie (the Canadian dollar´s nickname) and the course of the USDCAD could rise. Breaking above the long term trendline would be a strong signal for the bulls to step in and the pair could test the resistance level around the 1.2850 area (B). The next level where the bears could challenge the bulls would be around the 1.3300 -1.3380 zone (C).