USD/CAD Price Analysis: Megaphone advocates further grinding around 1.3700
- USD/CAD struggles for clear directions inside a trend widening formation.
- Sustained trading beyond monthly support, 200-SMA keeps buyers hopeful.
- Monthly top, May 2020 peak could lure buyers past 1.3840, sellers have a bumpy road to return.
USD/CAD treads water around 1.3700 during Tuesday’s Asian session, taking rounds inside a one-week-old megaphone formation of late.
Although the latest bearish megaphone advocates a gradual pullback of the USD/CAD prices, the firmer oscillators and the pair’s sustained trading beyond the key supports to keep the buyer hopeful. Among the important supports, the one-month-old ascending trend line, the stated megaphone’s lower line and the 200-SMA are crucial.
Hence, the USD/CAD pair’s latest weakness could initially aim for the monthly support of 1.3640 before extending a rebound from the megaphone’s support, near 1.3585.
Should the quote fails to rebound from 1.3585, the following moves reject the trend-widening pattern and highlight the 200-SMA level of 1.3560 as the next strong support.
In a case where the USD/CAD bears dominate past 1.3560, the odds of witnessing a fresh low, currently around 1.3500 can’t be ruled out.
Alternatively, recovery moves may initially aim for the megaphone’s upper line, close to 1.3840 at the latest, before challenging the monthly top surrounding 1.3980.
During the quote’s run-up beyond 1.3980m, the 1.4000 psychological magnet could test the USD/CAD bulls before directing them to the mid-2020 peak near 1.4175.
USD/CAD: Four-hour chart
Trend: Grinding higher