USDCAD is attempting to pierce below the 200-day simple moving average (SMA) after its latest recovery from the 1.3041 level, which extended the price past all SMAs but fell short of the resistance structure. The pair seems to be imprisoned within the 1.3382 and 1.3015 structure lasting nearly five-months, something also backed by the converging SMAs.
The short-term oscillators, although improving, reflect some easing in the positive momentum. The MACD is rising above its red trigger line in the positive zone, while the RSI – located in bullish territory – has turned down. Moreover, the ADX confirms the positive trend.
Regaining control, buyers would initially need to drive the price above the 1.3290 level, which is the 50.0% Fibonacci retracement of the down leg from 1.3564 to 1.3015. Moving higher, more sustained buying would be required to overcome the challenging resistance structure of 1.3343 to 1.3382, which also encapsulates the 61.8% Fibo of 1.3354. Surpassing this, the 76.4% Fibo of 1.3434 could hinder further advances towards the peaks.
Otherwise, if sellers manage to penetrate below the 200-day SMA at 1.3276, support could then come at the 38.2% Fibo of 1.3224. Lower, the 50- and 100-day SMAs around 1.3205 may hinder a further drop to test the 23.6% Fibo of 1.3144 and nearby swing low of 1.3115, before the support structure of 1.3041 to 1.3015 comes into focus.
In brief, the short-term is bullish, while the medium-term bias remains neutral restrained within 1.3382 to 1.3015. A break above or below these limits would reveal the broader direction.
