USD/CAD has finally dropped below the support area of 1.3160 and is currently trading at 1.31287. The last week’s closing at 1.3100 has raised the possibilities of a further drop towards 1.3020 in the coming days. The Canadian dollar is getting support from the weak US dollar, the US Dollar index is in a bearish zone near 93.20. The pair’s immediate support is at 1.3100, other supports are at 1.3070 and 1.3055 levels. The intraday resistance is at 1.3140 another resistance is present at 1.3175.
The MACD is below the zero line and supportive of the bears especially after a bearish crossover on 7th October. The Mid Bollinger band is at 1.3266 and the lower band support is at 1.3094. The SMA-14 is indicating resistance at 1.3285 and the SMA-50 is showing a resistance area at 1.3219. The RSI is below the neutral zone and in line with the on-going downwards move. The multi-timeframe analysis is suggesting a further bearish price pattern on weekly and daily charts. However, on the daily charts, a higher gap opening is suggesting a small correction therefore selling the pair on a small rally is a good idea. A decent selling entry would be at or near 1.3165 with a target of 1.3110/1.3100. A tight stop-loss for this trade would be just above the 1.3200 resistance area.
An intraday closing below 1.3100 is likely to accelerate the downtrend and the possibility of testing the 1.3020/1.3000 level would be high. On the upside, only an intraday closing above 1.3220 would be supportive of the bulls.
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