USDCAD: More Weakness Expected Towards Key Support

Barchart · 3d ago

The aggressive reversal has taken USDCAD much lower than we initially expected, but we have to respect the price action. On the daily chart, the market is turning lower from the 61.8% Fibonacci retracement level. However, the current decline could still unfold as another three-wave move from the recent high, potentially representing wave B within a seven-swing recovery. This means the higher-degree recovery from the February lows may not be complete yet.

USDCAD: More Weakness Expected Towards Key Support
USDCAD Daily Chart

In the short term, the strong decline on the 4-hour chart suggests that more weakness could follow towards the lower boundary of the bullish channel visible on the daily chart. We could still see some corrective rallies, ideally towards the 1.4150 resistance area, before another sell-off. However, if the current decline is unfolding in only three waves, USDCAD could be approaching important support around 1.4000, where a reversal higher may eventually follow.

USDCAD: More Weakness Expected Towards Key Support
USDCAD 4H Chart

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