The USD / CAD pair is trading within a downtrend channel formed on a 4-hour chart since September 20. It remains at the trading levels of September 7 and there are no signs of a technical rebound.
Despite the strength of the dollar, the loonie has proven to be stronger than the American currency. As a result, USD/CAD has fallen to the low of 1.2595, has accumulated 350 pips in part favored by higher oil prices, since the loonie is positively correlated to this commodity.
The short-term technical outlook is on the downside, so USD / CAD is likely to trade firmly lower until it reaches the 1.2500 psychological level. At this level, the bottom line of the symmetrical triangle is located and it could be a good opportunity to buy.
The SMA of 21 is located at 1.2587 which exerts downward pressure on the pair. So, in the next few hours if a pullback occurs towards this level, it will be a good opportunity to sell with targets at 1.2510.
The main bearish channel is located around the EMA of 200. If a rebound occurs above 1.25, the pair could continue until it finds a strong barrier in this area. If it does not have enough strength to overcome this upside obstacle, it will be a good opportunity to sell around 1.2625, and a take profit can be placed at 1.2570, 1.2510. If the pair breaks this level, the price can reach the level of 2/8 of murray around 1.2451.
As long as it remains below the 200 EMA around 1.2638, the bearish bias is likely to remain in place. This level is supported by the bearish channel line and the 21 SMA located at 1.2687. These levels will serve as resistance if USD / CAD starts an uptrend. A sharp break above the symmetrical triangle pattern will be a good chance to buy if the pair consolidates above 1.2638.
The oscillator of the eagle indicator is showing a signal of positive divergence, which means that the trade volume is increasing. If USD/CAD consolidates above 1.2630, it could confirm the bullish signal.
Support and Resistance Levels for October 08 - 11, 2021
Resistance (3) 1.2641
Resistance (2) 1.2620
Resistance (1) 1.2573
Support (1) 1.2523
Support (2) 1.2502
Support (3) 1.2464
Trading tip for USD/CAD for October 08 - 11, 2021
Buy above 1.2510 with take profit at 1.2587 and 1.2638 (EMA 200), stop loss below 1.2480.
Sell if pullback 1.2587 or 1.2635, with take profit at 1.2540, 1.2510 and 1.2451 (2/8), stop loss above 1.2670.The material has been provided by InstaForex Company - www.instaforex.com