USD/CAD Value Forecast: USD/CAD bearish construction intact, short-term bounce hinges on 1.3700 help

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Canadian Dollar holds steady as markets await key movers

USD/CAD dips towards 1.3700 regardless of stronger US JOLTS knowledge as merchants flip cautious forward of Wednesday’s BoC resolution.
Technical setup favors bears with USD/CAD caught in a descending channel; 1.3700 acts as short-term help.
Momentum indicators counsel exhaustion with the RSI close to oversold ranges and the MACD shedding its bearish momentum.

The Canadian Greenback (CAD) holds agency towards the US Greenback (USD) on Tuesday, with the USD/CAD pair buying and selling sideways in the course of the American session to commerce round 1.3720. The pair had stabilized earlier within the day because the Buck tried a gentle rebound, however misplaced steam regardless of a stronger-than-expected JOLTS Job Openings report. Market individuals stay cautious forward of the Financial institution of Canada’s (BoC) charge resolution on Wednesday, with expectations leaning towards the central financial institution holding rates of interest regular.

Shifting on to the technicals, the broader image nonetheless favors the bears. USD/CAD has been locked in a gradual downtrend, carving out decrease highs and decrease lows inside a descending channel since March. On the draw back, quick help is seen round 1.3700, which has emerged as a short-term flooring throughout current classes. A sustained break beneath this stage might pave the best way towards stronger help close to 1.3600, which aligns with the decrease boundary of the channel. A clear breach of that zone would doubtless set off a recent wave of promoting, probably exposing the 1.3520–1.3500 space subsequent.

On the upside, any restoration would first must clear the 21-day Exponential Shifting Common at 1.3832 — a dynamic resistance stage that has capped current rallies. A break above the channel prime and the 1.3850 area can be a extra significant sign that bulls are regaining management, probably opening the trail towards the 1.4000 deal with.

That stated, momentum indicators counsel that the bearish momentum could also be beginning to fade. The Relative Energy Index (RSI) is presently sitting simply above the oversold threshold close to 35. Whereas this stage isn’t excessive, it does sign that promoting stress may very well be nearing exhaustion. The RSI has remained beneath 50 for a lot of the previous month, indicating that sellers have had the higher hand for some time. Some patrons might begin to check the waters. In the meantime, the Shifting Common Convergence Divergence (MACD) continues to be in destructive territory, however the histogram bars have been shrinking — an indication that the downward momentum is weakening. This flattening suggests the bears are shedding steam, and the pair may very well be organising for a short-term bounce if the 1.3700 psychological stage continues to carry.