USDCAD posted two strong green days this week to touch one-month highs at 1.3087 and is set for its third weekly gain today. Technically the pair could face further upside in the short-term as the RSI moves positively above its 50 neutral mark and the MACD strengthens above its red signal line and marginally above zero.
In case the price heads north to beat yesterday’s peak of 1.3087, where the 50% Fibonacci of the downleg from 1.3385 to 1.2781 is placed, resistance is expected to come between 1.3152-1.3225, formed by the 61.8% Fibonacci and the September 6 peak. Slightly higher, the 78.2% Fibonacci of 1.3255 which offered some support in June could attract some interest ahead of the 1.3385 top.
On the downside, the pair may potentially test the 38.2% Fibonacci of 1.3010 first before reaching the 23.6% Fibonacci of 1.2923. But beforehand, the 1.2960 level, which stood as support in early August might appear in the radar as well. Breaking below the 1.2781 bottom, the bearish sentiment would come back into play, probably triggering additional negative corrections towards 1.2660, a robust support and resistance during 2017.
In the medium-term, the negative picture has somewhat softened after the rebound on 1.2781, traders might still want to see the market closing decisively above the 50% Fibonacci before confirming that the recent bounce is sustainable
