The USDCAD currency pair has been in a persistent downtrend since reaching a high of 1.3654. While there has been a recent bounce from the low of 1.3406, it is likely to be a temporary consolidation phase within the overall downtrend.
Currently, the price action suggests that USDCAD is trading in a range between the support level at 1.3406 and the resistance level at 1.3460. This range-bound movement could persist for a couple of days as market participants assess the next directional move.
To maintain the bearish bias, it is important for USDCAD to hold below the 1.3460 resistance level. As long as this resistance level remains intact, the downtrend is expected to resume, potentially leading to further downside movement towards the 1.3300 area. Traders will closely monitor the price action around these levels for any signs of renewed selling pressure, which would reinforce the prevailing downtrend.
On the upside, a breakout above the 1.3460 resistance level could indicate a temporary pause in the downtrend. In such a scenario, the pair could experience another short-term rise towards the key resistance level at 1.3485. A successful break above this level would suggest a potential retracement towards the previous high at 1.3654.
