US Dollar Forecast: USD/CAD
USD/CAD slips to a fresh weekly low (1.3533) following the kneejerk reaction to the Federal Reserve rate-cut, but the exchange rate may attempt to further retrace the decline from the August high (1.3947) as it holds above the monthly low (1.3467).
USD/CAD Vulnerable as Post-Fed Weakness Persists
USD/CAD gives back the advance from the start of the week as it pulls back from a fresh monthly high (1.3648), and the exchange rate may consolidate over the remainder of the week as a bearish engulfing candlestick formation seems to be taking shape ahead of the close.
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With that said, the recent weakness in USD/CAD may persist as it appears to be reversing ahead of the 50-Day SMA (1.3661), but the exchange rate may continue to trade within the August range amid the flattening slope in the moving average.
USD/CAD Price Chart – Daily
Chart Prepared by David Song, Strategist; USD/CAD Price on TradingView
- USD/CAD seems to be carving a bearish engulfing candlestick formation as it gives back the advance from the start of the week, with a break/close below 1.3520 (23.6% Fibonacci extension) raising the scope for a test of the monthly low (1.3467).
- Next area of interest comes in around 1.3440 (23.6% Fibonacci retracement), which lines up with the August low (1.3441), but USD/CAD may continue to trade within last month’s range if it struggles to break/close below 1.3520 (23.6% Fibonacci extension).
- Need a close above 1.3630 (38.2% Fibonacci retracement) to bring 1.3700 (38.2% Fibonacci extension) on the radar, with the next region of interest coming in around 1.3810 (161.8% Fibonacci extension) to 1.3850 (50% Fibonacci extension).
Additional Market Outlooks
AUD/USD on Cusp of Testing August High following Fed Rate Cut
EUR/USD Struggles to Test Monthly High Ahead of Fed Rate Decision
US Dollar Forecast: USD/JPY Clears December Low with Fed on Tap
GBP/USD Bull-Flag Starts to Unfold ahead of Fed and BoE Rate Decision
--- Written by David Song, Strategist
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