Chart of the day USDCAD bearish reaction from major descending trendline resistance

Short-term technical outlook on USD/CAD

Key technical elements

The recent minor rally seen in the USD/CAD from its 08 September 2017 low of 1.2057 has stalled right at the major descending trendline from 05 May 2017 now acting as a resistance at 1.2590.
Yesterday (18 Oct/U.S session), it has staged a bearish breakdown below the minor ascending trendline support from 08 Sep 2017 low.
The key short-term resistance now stands at 1.2500/2510 zone which is defined by the pull-back resistance of the aforementioned former minor ascending trendline support, the former minor swing low area of 18 Oct 2017 & the upper boundary of a minor descending channel from the recent 17 Oct 2017 high (see hour chart).
The next significant short-term supports rest at 1.2425 (minor swing low area of 28/29 Sep 2017 + 1.00 Fibonacci projection of the recent decline from 17 Oct 2017 high to 18 Oct 2017 swing low @0000GMT projected from18 Oct 2017 swing high @0900GMT) follow 1.2390 (former minor swing high areas of 21 Sep/27 Sep 2017, 38.2% Fibonacci retracement of the rally from 08 Sep 2017 low to 06 Oct 2017 high & the lower boundary of the minor descending channel from 17 Oct 2017 high).
The 4 hour RSI oscillator still hovering below its corresponding resistance at the 54% level coupled with the hourly Stochastic oscillator coming close to its extreme overbought level. These observations suggest short-term downside momentum of price action remains intact.

Key levels (1 to 3 days)

Intermediate resistance: 1.2483

Pivot (key resistance): 1.2500/2510

Supports: 1.2425 & 1.2390

Next resistance: 1.2590

Conclusion

Therefore, as long as the 1.2500/2510 key short-term pivotal resistance is not surpassed, the USD/CAD may see a further potential decline towards the next supports at 1.2425 follow by 1.2390 next.

However, a clearance above 1.2510 shall invalidate the bearish scenario for a squeeze up to retest the recent 1.2590 swing high of 17 Oct 2017.

Charts are from eSignal

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