FxNews—The American Dollar has been trading in a bear market against the Canadian Dollar (loonie) since its August 5 high of $1.394. Robust selling pressure has driven the USD/CAD price below the 50% Fibonacci retracement level.
As of writing, the pair is consolidating at about 1.374 after the bears tested the 61.8% Fibonacci at 1.372, a supply zone in conjunction with the July 16 high. The USD/CAD 4-hour chart below demonstrates the price, fair value gap locations, candlestick patterns, and key Fibonacci levels.
USDCAD Technical Analysis – 8-August-2024
The technical indicators in the 4-hour chart suggest the primary trend is bearish, but the pair is oversold, and the U.S. Dollar could erase some of its recent losses. Hence, the USD/CAD exchange rate might rise to test the upper resistance levels. It is worth mentioning that the trading asset’s price is below the 50- and 100-period simple moving average, signaling that the bear market prevails.
- The awesome oscillator indicator is below the signal line, depicting -0.007 in the description. Meanwhile, the recent AO bar turned green, easing the selling pressure.
- The relative strength index value is below the median line, showing a 39 value and rising. This indicates that the uptick momentum is strengthening.
- The stochastic oscillator gives an exciting signal. The %K line is deep in oversold territory, recording a value of 14. This indicates that the USD/CAD price is oversold, and a correction phase could be imminent.
USDCAD Forecast – 8-August-2024
The primary trend is bearish, with the immediate resistance resting at the July 16 high, the 1.370 mark, in conjunction with the 61.8% Fibonacci retracement level. Additionally, the stochastic oscillator oversold signal could result in the USD/CAD price testing the 50-period SMA-backed resistance at 1.377, the July 22 high.
Furthermore, if the USD/CAD price exceeds the July 22 high (1.377), the next resistance level will be the 100-period simple moving average, which is approximately 1.382.
Please be aware that the bullish scenario should be invalidated if the price dips below the July 16 high at 1.370.
- Also read: USDCHF Technical Analysis – 7-August-2024
USDCAD Bearish Scenario – 8-August-2024
The primary support that held the price to dip more rests at the July 16 high, the 1.370 mark. The downtrend will likely be triggered if the bears (sellers) close and stabilize the price below 1.370. If this scenario unfolds, the next supply zone will be the 78.6% Fibonacci retracement level at 1.366.
USDCAD Support and Resistance Levels – 8-August-2024
Traders and investors should closely monitor the key levels below to make informed decisions and adjust their strategies accordingly as market conditions shift.
- Support: 1.370 / 1.366
- Resistance: 1.377 / 1.382 / 1.386
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
