FX.co ★ Jackroay | USD/CAD

I see USDCAD on the daily timeframe continuing to respect the broader bearish structure after the recent corrective rebound lost momentum beneath the 1.3710–1.3730 resistance zone, and I believe this rejection confirms that sellers are still controlling the market direction. I notice that the pair attempted to stabilize during the pullback phase, but I can see that bullish pressure remained weak because the price failed to secure a daily close above the middle Bollinger Band, which I now view as a strong dynamic resistance barrier limiting recovery attempts. I also observe that every push higher is attracting renewed selling interest, and I think this behavior reflects persistent confidence from bears who are defending the upper boundary of the current corrective structure. I see the Awesome Oscillator remaining firmly in negative territory, and I interpret the appearance of fresh red histogram bars as a signal that bearish momentum is strengthening again after the temporary pause in the decline. I believe the market is gradually preparing for another impulsive leg lower, especially while the price continues trading below the important 1.3740 invalidation zone. I also think that the recent candles are showing hesitation from buyers because upward attempts are losing follow-through before reaching major resistance levels, which reinforces the probability of renewed downside continuation. I see the nearest bearish objective around the 1.3590–1.3565 support area, and I believe this zone could become the next magnet for price action if selling pressure continues increasing over the coming sessions. I also consider the possibility that a decisive breakout below the lower Bollinger Band could trigger stronger downside acceleration, potentially opening the path toward the psychological 1.3500 level. I believe volatility may expand sharply if sellers successfully force the pair beneath recent lows, because such a move would confirm continuation of the dominant daily downtrend. I still maintain a bearish outlook overall, and I think any short-term recovery toward resistance is likely to be viewed by the market as another opportunity to re-enter sell positions rather than the beginning of a sustainable reversal.

I agree that the weekly close on USDCAD creates a very complicated technical picture, and I think the market intentionally left traders uncertain heading into the weekend because buyers failed to maintain control above the 1.3680 area despite several attempts to stabilize there. I see the long upper wick, or “horsetail,” on the weekly candle as an important warning signal, and I interpret it as evidence that long positions were actively unloaded before the market closed, which usually reflects declining confidence from bulls at elevated prices. I also believe the rejection from higher levels increases the probability that the recent upward movement was more corrective than impulsive, especially since the market could not sustain momentum near resistance. I notice that the Ichimoku structure is beginning to look overheated as well, and I think the large distance between the current price and the Tenkan-sen and Kijun-sen lines clearly suggests that the pair has stretched too aggressively in a short period of time. I usually treat this kind of separation as a sign that a cooling pullback is becoming increasingly likely, because price often gravitates back toward equilibrium after excessive expansion away from the Ichimoku balance lines. I still see the 1.3716 target as technically possible, but I also think the market currently lacks the momentum needed for a confident breakout continuation, particularly after such a hesitant weekly finish. I will also be paying close attention to the 1.36440–1.36285 support zone because I believe this area could determine whether the correction remains shallow or develops into a deeper bearish retracement. I think a clean breakdown below that range on Monday would strengthen the bearish scenario significantly and could encourage sellers to extend pressure toward lower daily support levels. I also expect market sentiment early next week to depend heavily on whether buyers defend support aggressively or continue taking profits after the recent rise. I remain cautious overall, and I believe waiting for a proper retest of support before committing to a stronger directional bias is the most technically reasonable approach in the current conditions.