USDCAD is trading around the 50- and 100-period simple moving averages (SMAs), which appear to have hindered the decline from the 1.2800 handle from diving towards the lower regions of the two-week sideways market. The 50- and 100-period SMAs are endorsing an upside trend in the pair.
The Ichimoku lines confirm the neutral bearing and currently do not offer convincing directional forces in the pair, while the short-term oscillators suggest that driving momentum is weak. The MACD is below its red trigger line but slightly north of the zero mark, while the RSI is flirting with the 50 neutral level. The stochastic %K line has bounced a tad higher off the 20 level, but the positive charge is still looking feeble.
If the price climbs above the cloud, initial upside friction could unfold around the red Tenkan-sen line at 1.2741 and the 1.2752 high. In the event the price persists northbound of the 1.2782-1.2796 ceiling, which consists of the recent rally peaks in the last two weeks, the bears may attempt to curb advances of price action between the 1.2635 and 1.2796 barriers. However, should a positive breakout of the range unfold, bullish impetus could stumble around the 1.2813 obstacle before buyers jump to challenge the 1.2830-1.2852 resistance section, moulded by the highs over the second half of December 2021.
Now, the latest bearish trajectory of the pair is presently tackling an area of support between the 50- and 100-period SMAs at 1.2711 and 1.2693 respectively. If the price fails to produce a foothold in this zone, the retreat in the pair may remain heavy with sellers then diving to defy the fortified 1.2635-1.2661 floor of the consolidation. Should this hardened foundation give way, the short-term picture in the pair may start to reclaim its prior negative tilt with the price sinking towards the 1.2553-1.2569 support band.
Summarizing, USDCAD is confined in a sideways trend with a lower limit of 1.2635-1.2661 and an upper limit of 1.2782-1.2796. A decisive bearish or bullish breakout of these boundaries may reveal a clearer price direction.
