USD/CAD Bears Unleashed: Navigating the Bearish Momentum

USD/CAD Bears Unleashed: Navigating the Bearish Momentum

The USD/CAD pair maintains its downward trajectory, securing another leg of the bearish journey after encountering resistance at the pivotal 1.3400 level. The 50% Fibonacci level once again proves to be a significant turning point, serving as a robust barrier within the 50% - 61.8% Fibonacci resistance zone. As the pair adheres to its prevailing downtrend, the US Dollar (USD) finds support from elevated US Treasury bond yields, positioning itself close to a three-week peak established last Friday.

The benchmark 10-year US government bond yield remains steadfast above the 4.0% threshold, reflecting diminished expectations for a more aggressive policy easing by the Federal Reserve (Fed). This favorable environment acts as a tailwind for the Greenback, consequently bolstering the USD/CAD pair.

In our technical forecast, we maintain a bearish outlook, anticipating the ongoing bearish momentum to persist as the pair navigates the complexities of the market landscape.

Our preference

Short positions below 1.3530 with targets at 1.3300 & 1.3200 in extension.

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