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    Technical Analysis – USDCAD falls into Ichimoku cloud, increasing risk of trend reversal

    USDCAD extended losses on Monday, falling for a fourth day in a row. Prices have now dipped into the daily Ichimoku cloud and have fallen below the tenkan-sen and kijun-sen lines. The RSI has fallen into bearish territory below 50. These factors increase the risk of a trend reversal. Looking at the MACD, there is a bearish divergence, as the oscillator was declining from August while prices were rising.

    Immediate support comes in at the key 1.3100 level and a break below this will bring a deeper fall to the September 18 low of 1.3011. To the upside if prices manage to break back above the kijun-sen resistance at 1.3236 then there is scope to target the 11-year high of 1.3456 that was hit on September 29.

    In the big picture, the uptrend from 1.1919 is still intact unless there is a fall below 1.3000.

    Risk Warning: Forex, Commodities, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you fully understand the risks involved and do not invest money you cannot afford to lose. Please refer to our full Risk Disclosure.


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