USDCAD Weekly Analysis – July 2, 2023

The USDCAD currency pair has experienced a significant development as it broke below a key support level at 1.3225, signaling a shift in the long-term trend. The pair is now firmly positioned in a downtrend from its previous high of 1.3977. Traders should anticipate further declines in the coming weeks, with downside targets in focus.

The breach of the 1.3225 support level confirms the shift in market sentiment towards a bearish bias for USDCAD. This development suggests that sellers have gained control, and the pair is likely to continue its downward trajectory. The next target for the pair is seen at 1.2900, which represents a significant psychological and technical support level. A breach below this level would further confirm the bearish outlook and pave the way for a potential decline towards the 1.2700 level.

On the upside, a notable resistance level to monitor is located at 1.3660. A break above this level would indicate a potential shift in market sentiment and could trigger a corrective rally. However, such a scenario would only signal a temporary halt in the downtrend rather than a full reversal. The previous high of 1.3977 would serve as the ultimate resistance level for a significant trend reversal.

In summary, USDCAD has transitioned into a long-term downtrend following the breach of the key support level at 1.3225. The pair is likely to experience further declines with targets set at 1.2900 and 1.2700. Traders should be cautious of temporary consolidations or minor corrections during the downward movement. A break above the 1.3660 resistance level would indicate a potential pause in the downtrend, but the broader outlook remains bearish. Evaluating relevant market factors and employing effective risk management strategies are essential when trading USDCAD.