USDCAD appears to be following the lower Bollinger band around 1.4060 after fading beneath the capping 50-period simple moving average (SMA) and the mid-Bollinger band around the 1.4140 threshold. The recent negative price action is also reflected in the short-term oscillators and seems to be aided by the recent bearish crossover of the 100-period SMA by the downward sloping 50-period one.
The MACD has marginally declined into the negative region and below its red trigger line, while the RSI continues to deteriorate in the bearish zone. Moreover, the stochastic lines have penetrated into the oversold territory. The current negative signals suggest that the near-term picture could continue to dwindle for a bit longer.
To the downside, initial key support could come from the March 31 low of 1.4012 – that being the 38.2% Fibonacci retracement of the up leg from the December 31 low of 1.2951 to the multi-year high of 1.4667. Dropping further, a more important obstacle, the 1.3921 trough, would need to be breached for the bears to test the 200-period SMA at 1.3849 and ultimately bring the 50.0% Fibo of 1.3810 and the 1.3724 trough into play, to halt the decline.
If buyers resurface, the 50-period SMA coupled with the mid-Bollinger band around 1.4140, could be first to deter the push up ahead of the 100-period SMA and upper Bollinger band at 1.4227. Overtaking these, the 23.6% Fibo of 1.4262, and the nearby peaks of 1.4300 and 1.4348 could prevent the climb from reaching the 1.4422 resistance.
Overall, the near-term bias looks to be gaining negative backing, and a break below 1.3921 could open the door for further loss of ground in the short-term picture.
