Chart of the day USDCAD bearish reaction from major descending trendline resistance

Blue avatar for guest contributors
By :  ,  Financial Analyst

Short-term technical outlook on USD/CAD

Key technical elements

  • The recent minor rally seen in the USD/CAD from its 08 September 2017 low of 1.2057 has stalled right at the major descending trendline from 05 May 2017 now acting as a resistance at 1.2590.
  • Yesterday (18 Oct/U.S session), it has staged a bearish breakdown below the minor ascending trendline support from 08 Sep 2017 low.
  • The key short-term resistance now stands at 1.2500/2510 zone which is defined by the pull-back resistance of the aforementioned former minor ascending trendline support, the former minor swing low area  of 18 Oct 2017 & the upper boundary of a minor descending channel from the recent 17 Oct 2017 high (see hour chart).
  • The next significant short-term supports rest at 1.2425 (minor swing low area of 28/29 Sep 2017 + 1.00 Fibonacci projection of the recent decline from 17 Oct 2017 high to 18 Oct 2017 swing low @0000GMT projected from18 Oct 2017 swing high @0900GMT) follow 1.2390 (former minor swing high areas of 21 Sep/27 Sep 2017, 38.2% Fibonacci retracement of the rally from 08 Sep 2017 low to 06 Oct 2017 high & the lower boundary of the minor descending channel from 17 Oct 2017 high).
  • The 4 hour RSI oscillator still hovering below its corresponding resistance at the 54% level coupled with the hourly Stochastic oscillator coming close to its extreme overbought level. These observations suggest short-term downside momentum of price action remains intact.

Key levels (1 to 3 days)

Intermediate resistance: 1.2483

Pivot (key resistance):  1.2500/2510

Supports: 1.2425 & 1.2390

Next resistance: 1.2590


Therefore, as long as the 1.2500/2510 key short-term pivotal resistance is not surpassed, the USD/CAD may see a further potential decline towards the next supports at 1.2425 follow by 1.2390 next.

However, a clearance above 1.2510 shall invalidate the bearish scenario for a squeeze up to retest the recent 1.2590 swing high of 17 Oct 2017.

Charts are from eSignal


The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. City Index recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Related tags: Forex

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar