USDJPY Technical Analysis / Forex Technical Analysis

USDCAD Overbought at 1.399 Resistance – Is a Drop Coming?

FxNews—On Thursday, the S&P/TSX Composite Index, Canada’s main stock market index, fell by 1.4% to close at 24,157, its lowest level in three weeks. The decline was mainly due to poor performances by commodity producers, such as mining and energy companies.

TSX trades bearish at 24,157

Agnico Eagle Shares Drop Despite Strong Third Quarter

Mining stocks were among the hardest hit. Agnico Eagle’s shares dropped by 2.1%, even though the company had a strong third quarter. This was because gold prices decreased from their record highs. Major mining companies like Barrick Gold and Wheaton Precious Metals saw their stock prices fall by 3.5% and 2.1%, respectively.

The energy sector also pulled the market down. Cenovus Energy led losses in this sector, with its stock declining by 3.4% after it reported disappointing third-quarter results. Meanwhile, large companies such as RBC (Royal Bank of Canada), Shopify, and Brookfield also performed poorly, with their shares decreasing between 1.8% and 2.1%.

Also read: USD/JPY Flipped Below 152 Amid BoJ Keeps Rate Unchanged

On the economic side, preliminary estimates suggest that Canada’s economy grew by 0.3% in September, bringing third-quarter growth to 0.2%. Despite the recent declines, the TSX index managed to post a 0.7% gain in October.

USDCAD Technical Analysis – 1-Novermber-2024

USD/CAD is overbought, as indicated by the 14-period Stochastic and RSI indicators.

The U.S. Dollar is in a strong uptrend against the Loonie, poised to break the 1.394 resistance. Interestingly, USD/CAD pulled back from 1.394 before August 5.

Additionally, the Stochastic Oscillator and RSI 14 hover in overbought territory on the daily chart. This development in the technical indicators means the U.S. dollar is overpriced against its northern neighbor, the Canadian dollar.