- USD/CAD has retreated after bottoming on September 25.
- The correction that followed now appears to have come to an end and the pair could be vulnerable to a recapitulation.
USD/CAD suddenly reversed course amid a strong downtrend and recovered on September 25. The pair quickly rose from 1.3420 to 1.3539, but now the rebound seems to have stalled after reaching a similar level for the last two consecutive days (blue box on the chart below).
USD/CAD Daily Chart
There is a chance that the pullback has come to an end and since the medium-term trend remains bearish, prices could start to fall again.
A move below 1.3457 (September 26 low) would confirm the resumption of the downtrend, probably at least to the September 25 low of 1.3420. A close below that level would provide bearish confirmation of further declines towards the lows of the range, a zone that starts around 1.3222 and ends at 1.3106.
USD/CAD appears to have formed a large zig-zag pattern known as Measured Movement since peaking on August 5. If so, then it bodes bearishly for the pair, as the downside target for the last wave C of the pattern is at least 1.3326, the 61.8% Fibonacci extension of wave A.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
