USDCAD held in losses on Monday, dropping to a five-week low of 1.2383 before turning higher around the 1.2400 handle.
The RSI in the four-hour chart is missing direction in the bearish area, while the red Tenkan-sen keeps falling below the blue Kijun-sen line, increasing chances for a meaningful negative bias in the short-term trading. However, the stochastic oscillator posted a bullish crossover within the %K and %D lines in the oversold territory, suggesting an upside correction.
Should the price close comfortably above the 1.2400 crucial level, traders could add more value to the pair, pushing the market up to the 23.6% Fibonacci retracement level of the down leg from 1.2645 to 1.2383 at 1.2445. The 20-period simple moving average (SMA) at 1.2462 and the 1.2472 resistance should be in focus ahead of the 38.2% Fibonacci of 1.2483.
In the negative scenario, the market could retest to the bottom of 1.2383. If this proves easy to overcome this time, the decline may next pause somewhere around the 1.2363 support, while even lower, investors could shift attention to the 1.2250 barrier, taken from the low in January 2018.
In brief, USDCAD is in negative mode in the short- and long-term timeframes, especially after the latest decline to 1.2383. Any upside movements above 1.2700 may shift this bias to slightly positive.
