Since 21 December 2020, the USDCAD pair on the 4-Hour Chart has been in a downtrend registering the high price at 1.29555. This was followed by a series of lower tops and lower bottoms and then on 29 December 2020, the USDCAD pair recorded the low price of 1.27788.
Price Action Analysis
When applying Oscillator Analysis to the price chart, one can see that price is trading below the SMA 60 period Moving Average line, a fact which confirms the Loonie’s downward direction.
The Moving Average/Convergence Divergence (MACD) Oscillator is recording values below the zero line which hints to the bearish bias of financial instrument.
Additionally, the Relative Strength Index (RSI) Oscillator registers values below the fifty line which indicates negative sentiment.
All three technical indicators are in agreement with regards to the downward bias of the pair.
Fibonacci Price Targets
Three price targets may be calculated upon applying the Fibonacci tool to the price chart.
The first price target is estimated at 1.27734 (161.8%),
the second price target is seen at 1.27106 (261.8%)
and finally the third price target is projected at 1.2609 (423.6%).
The Loonie is currently trading below the downtrend line. The presence of the Bearish Evening Star pattern hints at a potential rally to the downside.
Of course, supply and demand as well as the crowd sentiment will determine the future course of Loonie.
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