FX.co ★ Technical analysis and recommendations for USD/CAD on May 21, 2021

Since the pair of North American dollars is considered quite rare, the analysis for this instrument will start with a weekly period, and the main attention will be paid to the technical picture.

Weekly

On this timeframe, it is visible that the USD/CAD pair is trading in a bearish trend, as evidenced by the descending channel built at the points 1.4667-1.2652 (resistance line) and 1.3314 (support line). The pair is trading near the middle dotted line of this channel, which plays the role of support or resistance. In the current situation, the middle line can support the price and stop its further decline, provoking a correction. In particular, this development is indicated by the previous weekly Doji candle. Although the pair has already fallen below the previous lows at the end of the five-day trading session, it has not yet continued the downward movement, and it continues to hold above the middle line of the descending channel.

To maintain and develop the bears' advantage on this pair, they need to lower the quote under the middle line of the channel and consolidate below. After that, the dotted line will already perform the function of resistance. On the rollback to it, you can consider options for opening deals for sale. The opposing side needs to find support at the middle line, after which the course can turn up to the area of 1.2332, where the red line of the Tenkan Ichimoku indicator passes. More distant targets of a possible course correction will be the most important psychological and technical level 1.2500 and the area 1.2515-1.2565, where the channel resistance line passes, and the blue Kijun line of the Ichimoku indicator is slightly higher.

Daily

On the daily chart, the pair fell to the round level of 1.2000. However, from 1.2011, it began to correct or rebounded, which should not cause much surprise. As a rule, it is from such marks that rebounds or corrective pullbacks occur. At the moment, the "Canadian" is trading in a relatively narrow price range of 1.2011-1.2143. As you can see, the pair still can not decide on fixing above or below the red line of the Tenkan Ichimoku indicator. However, it is necessary to take the exit from the range indicated by the green lines as a basis.

The USD/CAD bulls may try to get out of it. However, the level of 23.6 fibo from the decline of 1.2652-1.2011 is also quite capable of creating problems for players to increase the rate. I will assume that the bulls on the instrument will consistently need to pass the Tenkan, the upper limit of the range, and then 1.2163, where the 23.6 fibo passes. After these conditions are met, you can expect an adjustment to higher prices, namely in the area of 1.2200-1.2255. The bulls' plans can only be hindered by the breakdown of the support of 1.2011 and the withdrawal of the quote under the iconic psychological level of 1.2000. If we go to the trading recommendations for USD/CAD, then I consider the main sales. It is better to wait for a corrective pullback to the price zones of 1.2200-1.2255 and 1.2300-1.2330.