USDCAD at this point seems it may prolong its sideways course, pursuing the 200-day simple moving average (SMA). The horizontal posture within the Ichimoku lines and the 200-day SMA further sponsor this view.
The short-term oscillators further emphasize the pause in the market but lean towards a negative bias. The MACD, in the negative region has flattened above its red signal line, while the RSI hovers marginally below the 50 mark. That said the stochastic lines promote a downside direction, as does the nearing of a bearish crossover of the 100-day SMA by the 50-day one – that has merged with the downtrend line drawn from the 50-month peak of 1.4667.
Should selling interest pick up, early tough support could develop around the 1.3504 level, where the red Tenkan-sen line and the 200-day SMA have flatlined. If downside pressures extend below the 200-day SMA at 1.3483, the price may revisit the essential trough of 1.3314. Additional backing from the bearish overlap could see the 1.3314 low violated, sending the pair towards the 1.3200 handle.
Alternatively, immediately limiting upside moves is the 1.3633 level, that being the 23.6% Fibonacci retracement of the down leg from 1.4667 to 1.3314. A push above may encounter a resistance region from 1.3685 – 1.3724. Overcoming this, the descending trend line coupled with the bearish cross could impede a climb towards the 38.2% Fibo of 1.3833 and the 1.3850 barrier overhead. Proceeding higher, the focus may turn to the 50.0% Fibo of 1.3992 and the 1.4047 peak.
Concluding, the present very short-term neutral phase appears may edge towards the diagonal line, currently backing the prevailing bearish tone.
