- Friday’s bearish pin bar indicates the path of least resistance is to the downside.
- The pair has also breached an ascending trendline.
The USD/CAD pair is operating on slippery grounds, having created a bearish pin bar candle on Friday.
That pattern occurs when the day begins with optimism, but ends on a pessimistic note, forming a candle with a long upper wick, which represents a rejection of higher prices.
Friday’s pin bar marks a strong rejection above 1.33 and is preceded by multiple daily rejections above the psychological resistance.
Markets usually test dip demand after repeated failure at key levels. USD/CAD will likely drop to 1.3220 (100-day average) in the short-term – more so, as the bearish pin bar is backed by a bearish crossover on the MACD histogram and a downside break of the trendline connecting Oct. 29 and Nov, 19 lows.
A daily close above 1.33 is needed to revive the bullish setup.
Daily chart
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Trend: Bearish
Technical levels
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