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Canadian Dollar Forecast: USD/CAD Price May Correct Higher

Miguel A. Rodriguez
Miguel A. Rodriguez
05 November 2022
Last week, USD/CAD bears pressed USD/CAD to a multi-month low then pulled back allowing the pair to rally. Will bulls take control or will bears come back?

USD/CAD Technical Overview

  • Reversal signal on USD/CAD price chart  
  • Key chart levels and signals to consider

Bears Pullback  

On November 9, USD/CAD hit an over two-year low at 1.2926 then rallied as bears seemed to cover. Ultimately, a weekly candlestick closed in the green with a 0.8% gain. Alongside that, the Relative Strength Index (RSI) rose from 35 to 48 signaling a weaker bearish momentum.

USD/CAD Daily Price Chart (July 15 – November 18, 2020)

Chart source, Webtrader,

On November 11, USD/CAD climbed to the current 1.3047 – 1.3152 trading zone. Two days later, the price created a lower high at 1.3171 indicating that bearish momentum was still intact. Nonetheless, the downward trend may reverse due to a bullish price/RSI divergence as the former created a lower low while the latter created a higher low.   

A daily close above the high end of the zone ie, above 1.3152 reflects weaker bearish sentiment and may encourage bulls to rally USD/CAD towards 1.3353.

On the flip side, a close below 1.3047 may embolden bears to press the pair even lower towards 1.2914.

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USD/CAD Four Hour Price Chart (September 4 – November 18, 2020)

Chart source, Webtrader,

Today, USD/CAD respected the slopping bearish trendline originated from the November 4 high at 1.3298 reflecting that bears were not done.

In conclusion, while the bearish bias is still in place, the bullish divergence discussed above on the daily chart provides a good base for a possible reversal. Therefore, a break above 1.3176 may cause a rally towards the November 4 high at 1.3298. On the other hand, a break below the 1.3000 psychological level could send the price even lower towards 1.2936. As such, the support and resistance levels underlined on the chart should be considered.






Miguel A. Rodriguez
Miguel A. Rodriguez

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.