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US Dollar Forecast: USD/CAD Threatens March Low

Article By: ,  Strategist
September 25, 2024 9:00 PM

US Dollar Forecast: USD/CAD

USD/CAD may stage further attempts to test the March low (1.3420) as it carves a series of lower highs and lows, but the exchange rate may consolidate over the remainder of the month should the Relative Strength Index (RSI) continue to hold above oversold territory.

US Dollar Forecast: USD/CAD Threatens March Low

USD/CAD continues to register fresh monthly lows after failing to defend the August low (1.3441), and the weakness in the exchange rate may persist should it track the negative slope in the 50-Day SMA (1.3647).

In turn, USD/CAD may establish a bearish trend as the Federal Reserve projects a lower trajectory for US interest rates, and the US Dollar may face headwinds ahead of the next Fed interest rate decision on November 7 as the central bank appears to be on track to quickly unwind its restrictive policy.

 

With that said, a further decline in USD/CAD may push the RSI into oversold territory for the second time this year, but the oscillator may show the bearish momentum abating should it continue to hold above 30.

USD/CAD Price Chart – Daily

Chart Prepared by David Song, Strategist; USD/CAD Price on TradingView

  • USD/CAD extends the decline from the start of the week to register a fresh monthly low (1.3420), with a breach below the March low (1.3420) bringing the February low (1.3366) on the radar.
  • Next area of interest comes in around 1.3310 (50% Fibonacci retracement) but USD/CAD may attempt to retrace the decline from the start of the week as the Relative Strength Index (RSI) appears to be bouncing back ahead of oversold territory.
  • USD/CAD may try to negate the bearish price sequence should it pushes back above 1.3520 (23.6% Fibonacci extension), with a move above 1.3520 (23.6% Fibonacci extension) bringing 1.3630 (38.2% Fibonacci retracement) back on the radar. 

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

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