USDCAD held onto losses for the third day in a row, dropping to a one-month low of 1.3855 on Monday. Currently, the pair has been developing below the 20- and 40-period simple moving averages (SMAs) and the falling tentative trend line since March 19.
The RSI in the four-hour chart, is turning higher after the bounce off the oversold zone, while the stochastic oscillator is ready to form a bullish crossover with its %K and %D lines above the 20 line, increasing chances for some kind of a recovery in the short-term.
However, should the price close comfortably above the 20-period moving average (SMA), which has been unbreakable over the past week, traders could add more value to the pair, pushing the market up to 1.4050, which is the 23.6% Fibonacci of the down leg from 1.4670 to 1.3855 near the downtrend line. The 1.4080 barrier and the 38.2% Fibonacci level of 1.4165 would be strong resistances for continuing the medium-term bullish structure.
In the negative scenario where the 1.3855 halts downside movements, the market could retest the bottom of 1.3720. If this proves easy to overcome this time, the decline may next pause somewhere between the gap of 1.3440-1.3515 from March 6, while even lower, investors could shift attention to the 1.3310 number.
In brief, USDCAD is in bearish mode in the very short-term timeframe and bullish in the long-term picture.
