USDCAD still below 38,2% Fibonacci

One of the most interesting technical movements on the market can be currently seen on the USDCAD. That’s more interesting for long-term traders as we are talking about the weekly chart, so probably scalpers will not be so keen on following it.

The USDCAD is currently in a bullish correction of a strong downtrend, which happened in 2020 and the beginning of 2021. The thing is, there are signs that the current correction is coming to an end and the pair is very close to returning to a downtrend. I guess it doesn’t seem right, when you consider the recent strength of the US Dollar and yes, that’s what complicates this whole scenario.

From a technical side, it all looked marvelous. The price was climbing higher inside of the wedge pattern (black lines) and met the 38,2% Fibonacci. Most setups like this, end with a reversal and a drop but not this time.

In the case of the USDCAD, the price has so far kept pushing higher, that last week we almost got a bullish breakout. Only almost, as the price reversed and didn’t manage to close above 38,2% but it was pretty close.

As long as the USDCAD stays below 38,2% and inside of the wedge, the sentiment remains negative and this setup posses a great long-term bearish potential. The price closing the week above 38,2% would cancel this sentiment, but so far that’s not happening, so let’s see how far can sellers move with this one.