The USDCAD is showing signs of reversal and rejection at the 38% Fibonacci retracement and cloud resistance as we noted yesterday. Price is expected to move lower to new lows. Important resistance is the area between 1.2950-1.3050.
With the stochastic oscillator turning lower from overbought levels in the 4 hour chart, combined with a double rejection at the 38% Fibonacci retracement and cloud resistance, USDCAD is expected to move lower at least towards short-term support of 1.2860. The most probable scenario will be a decline towards 1.27.
On a weekly basis the stochastic shows that more downside should be expected while the weekly kijun-sen is about to cross the weekly tenkan-sen. Being below the weekly cloud and seeing such a cross will be a very bearish signal for the longer-term. As long as we are below 1.32 trend will remain bearish targeting 1.20 and lower.
