USD/CAD is going down. The price has broken down the channel in which it has been for months. It violate the static support identified by 50% of the Fibonacci retracement and set at around 1.33. This sudden downtrend is also due to the breakdown of the dynamic supports identified by the EMA 20 and 200 daily periods that are about to cross downwards. This could make an inversion of the main daily trend. From lateral to bullish would become moderately bearish.
In the last two sessions, secondary static support in the 1.3145 area was also broken down, confirming the break with a closure below it. In this technical scenario, the short-term trend is strongly bearish and should have as a final target the area identified by 61.8% of the Fibonacci retracement and set at 1.298.
This movement is also fundamentally supported. The market and investors are discounting the rate cut by a quarter of a point by the FED, liquidating positions in favor of the dollar from their portfolios at least until the announcement in late July favoring long positions on other majors. In addition, a series of Canadian data is expected in the coming days. Analysts say will be better than expected, further strengthening the currency of Canada (CAD).
USD/CAD is going down. So we recommend a short entry with final target 1.298. The intermediate target at 1.303. The first target 1.307. Set the stop above the third last candle at 1.322.
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