USDCAD is gaining some ground for the third consecutive day above the 20- and 40-day simple moving averages (SMAs), rebounding off the 33-month trough of 1.2585. The pair is flirting with the long-term falling trend line around the 1.2900 psychological level.
According to the technical indicators, the stochastic is suggesting an overbought market as the %K line advanced above the 80 level, while the RSI is pointing upwards above the 50 level with stronger momentum than begore. The short-term moving averages are ready for an upside move, while the Ichimoku lines are still in a bearish mode.
In case that the price climbs above the ascending line, immediate resistance could come from the 1.2950 barrier, which holds inside the Ichimoku cloud. Even higher, the 23.6% Fibonacci retracement level of the down leg from 1.4668 to 1.2585 at 1.3076 could attract investors’ attention ahead of the 1.3175 level and the 200-day SMA at 1.3274. Clearing these obstacles, the 38.2% Fibonacci of 1.3382 could be a crucial level.
On the other hand, a drop underneath the 33-month low of 1.2585 could send the price until the 1.2530 support, taken from the trough on April 2018 before meeting the 1.2250 barrier, registered on January 2018.
Summarizing, USDCAD has been in an upside move in the very short-term, however, in the bigger view, the market remains strongly negative.
