USDCAD remains under pressure as it holds below the 23.6% Fibonacci retracement level of the upleg from 1.2060 to 1.3385, around 1.3073. Moreover, the price plummeted below the 20- and 40-simple moving averages (SMAs) on Wednesday in the daily timeframe, indicating for a possible bearish correction.
From the technical point of view, the momentum indicators seem to be negative and the market could ease a little bit more in the short-term. The RSI indicator is in negative territory after declining sharply in recent days. Also, the MACD oscillator dropped below the zero line and stands far below the trigger line.
Should prices decline further, immediate support could be found at the 1.3020 bottom, taken from the lows in the last few days. Then a leg below that level, the price could meet the 38.2% Fibonacci mark of 1.2880, increasing chances for further bearish movements.
If the market manages to pick up speed and jump above the 23.6% Fibonacci and the 20- and 40-SMAs, the one-year high of 1.3385 could offer nearby resistance for the bulls. A significant close above this level would drive the pair towards the next hurdle of 1.3550 taken from the highs on June 2017.
Having a look at the bigger picture, the greenback seems to be in a strong bullish rally against the loonie as it has been holding within an ascending movement since September 2017.
