The USDCAD currency pair has recently broken below the lower border of a significant rising price channel on the weekly chart. This breakdown suggests a potential shift in the long-term market dynamics, indicating a possible end to the uptrend that began from the 1.2006 level.
The break below the channel support opens the door for a deeper decline in the pair. Traders should watch for a potential test of the 1.3225 support level. If the price action reaches and holds below this level, it would indicate a completion of the long-term uptrend that started at 1.2006. The next significant support area could be found around 1.2900.
On the upside, if the 1.3225 support level holds, the price action within the trading range between 1.3225 and 1.3977 could be considered as a consolidation phase for the previous uptrend. This range-bound movement suggests a period of indecision and potential market equilibrium.
To resume the upward momentum, the USDCAD pair would need to break above the 1.3977 resistance level. A successful breach of this level would indicate a reversal in the recent downtrend and could lead to a potential move towards the 1.4500 area.
In summary, the USDCAD pair has broken below the lower border of its rising price channel on the weekly chart, suggesting a potential reversal of the long-term uptrend. A deeper decline towards the 1.3225 support level would indicate a completion of the uptrend and potentially lead to further downside towards 1.2900. However, if the 1.3225 support holds, the price action within the trading range could be viewed as consolidation. A breakout above the 1.3977 resistance level would suggest a resumption of the uptrend, with a possible target around 1.4500. Traders should employ effective risk management strategies and stay informed about market developments to make well-informed trading decisions in the USDCAD market.