USD/CAD is showing some bullish reversal insignia but it is still too soon to be confident that bulls are back in the driving seat.
USD/CAD is showing bullish signs but lacks upside momentum and remains in a downtrend. It would have to rise more strongly and break above some key levels to indicate a reversal of the dominant bear trend. The risks, therefore, continue to be to the downside as the bear trend remains intact. A break below the 1.3440 lows would extend the downtrend, possibly to the next target at 1.3380. USD/CAD Daily Chart USD/CAD formed a Two-Bar reversal pattern at the August 27 and 28 lows .
USD/CAD also broke above the trendline for the move down and this was accompanied by the Relative Strength Index momentum indicator rising out of its oversold zone, and providing a buy signal. This adds further evidence to the possibility of a reversal evolving. A close above 1.3520-25 would help confirm a bullish reversal and bring into doubt the validity of the bear trend. Such a break might see the pair move up to 1.3593.
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