As we explained in our previous post, USDCAD bears were in control of the trend as price was breaking below the triangle pattern. We also mentioned that we prefer to remain bearish for a move towards 1.28 as long as price was below 1.3150.
Green line - Support (broken)
USDCAD is trading below 1.30 at 1.2978 right now. Price continues lower early this week under pressure by sellers. It is a normal follow through after the end of the week break down we saw the previous week. Trend remains bearish and we continue to expect a move towards 1.28. Short-term resistance is at the green line at 1.3130. Previous support is now resistance.Despite the new lower low in price, the RSI is still above the 30 level. This is a bullish divergence. This is not a reversal signal but a warning towards bears that they need to be cautious. With the RSI now at 33.91, bears need to move price stronger lower and the RSI break below 29.57 in order to cancel the bullish divergence. It is important to see how bulls respond this week to the selling pressures. USDCAD might be very close for a major low around 1.29 and a major reversal. USDCAD might be very close to ending the entire downward move from 1.4650. Bears need to be cautious and get overconfident.
