USDCAD has been in a downward trend since February last year and has not looked back since then. Price continues making lower lows and lower highs breaking support levels along the way. Price is now at the same level as the lows of 2017 and with the RSI in the daily chart showing major bullish divergence signals, I believe traders should prepare for a bounce higher.
Blue line - resistance and bounce target area
USDCAD is not heavily under pressure as are the rest fx pairs, as Dollar faces heavy selling after the NFP announcement. The RSI in the Daily chart shows very clearly the bullish divergence implying that the downside momentum is weak. With price currently below 1.21, resistance is found at recent highs of 1.2130-1.2140 and if this resistance is broken we can see price bouncing higher towards the blue horizontal line. USDCAD is oversold on a weekly basis and traders should prepare for a trend reversal. I believe downside potential is limited. There is no reversal signal yet only a warning. Above 1.2130-1.2140 we will get our first bullish signal.
