#USDCAD retraces to the .618% Fibonacci level and price rejects, where now?

#USDCAD has recently encountered significant resistance at the .618% Fibonacci retracement level, specifically at the price point of 1.4380. This particular level is often viewed by traders as a critical threshold, where the market may either reverse direction or continue its trend. The rejection at this Fibonacci level suggests that sellers are stepping in, indicating a potential shift in market sentiment. As we analyse the broader context, the question arises: will the DXY, which represents the strength of the US dollar against a basket of other currencies, continue to weaken further toward our target of 1.4180?

The dynamics of the DXY are influenced by various economic indicators, geopolitical events, and market sentiment. A weakening DXY typically correlates with a strengthening of other currencies, including the Canadian dollar, which is heavily influenced by commodity prices and economic data from Canada. As we monitor the movements of USDCAD, it is essential to consider the implications of monetary policy decisions, inflation rates, and employment figures from both the United States and Canada. These factors can significantly impact the exchange rate and may provide clues as to whether the DXY will indeed trend lower to our anticipated target of 1.4180.

In summary, the rejection at the .618% retracement level at 1.4380 serves as a pivotal moment for USDCAD traders, prompting a closer examination of the DXY's trajectory. Observing upcoming economic reports and market trends will be crucial in determining whether the DXY can sustain its current levels or if it will continue to decline toward the 1.4180 target, potentially altering the landscape for USDCAD trading strategies.

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