Sharp Downtrend in USDCAD

Over the past few weeks, the USDCAD pair has witnessed a consistent downtrend, with lower highs and lower lows. This bearish wave could be attributed to several factors, including fundamental and technical aspects such as economic indicators, market sentiment, and geopolitical developments. Fundamentally, the Canadian economy has shown signs of strength, supported by robust economic data and positive market sentiment. Factors like rising oil prices, which Canada heavily relies on as an exporter, have contributed to the CAD’s appreciation. Additionally, the Bank of Canada’s hawkish stance on monetary policy, indicating a potential interest rate hike in the future, has further boosted the CAD’s appeal. From a technical perspective, the price chart reveals a clear downtrend. The price line has experienced a significant decline, with strong bearish momentum. This is evident from the steep slope of the downward movement and the absence of any substantial bullish retracements. Such a sharp decline indicates a high level of selling pressure and suggests a dominant bearish sentiment in the market.