The USDCAD currency pair has encountered resistance around the 1.3667 level and experienced a pullback from its recent high at 1.3654. This price action suggests a period of consolidation for the ongoing uptrend that originated from 1.3314.
While a deeper decline is possible in the near term, traders should monitor the rising trend line on the 4-hour chart as a potential level of support. As long as this trend line holds, there remains a strong possibility for the uptrend to resume, with the potential for another attempt at testing the 1.3667 resistance level.
The failure to break above the resistance level should not be seen as an immediate reversal of the overall uptrend. Rather, it indicates a period of temporary pause and consolidation within the broader price action. The market may be taking a breather after the recent upward movement, and this consolidation phase allows for the potential accumulation of new buyers before the next leg higher.
It is important to closely monitor the price action around the rising trend line support. If the trend line is breached convincingly, it would suggest a shift in market dynamics and potentially lead to a deeper decline. In such a scenario, the next target would be the rising trend line on the 4-hour chart, which could provide a significant level of support.
On the other hand, if the trend line support holds, it would reaffirm the strength of the underlying uptrend and set the stage for another potential rise towards the 1.3667 resistance level. A breakout above this resistance would open the door for further upside movement, potentially targeting higher levels.
In conclusion, USDCAD is currently undergoing a period of consolidation below the 1.3667 resistance level. While a deeper decline is possible in the near term, as long as the rising trend line on the 4-hour chart holds, the uptrend from 1.3314 remains intact. Traders should closely monitor the price action around the trend line for potential clues regarding the resumption of the uptrend or a deeper pullback. Monitoring key levels and staying informed about market developments will be crucial for navigating the USDCAD pair effectively.
