USDCAD stunned, is resting at the mid-Bollinger band around 1.4070 after a deflection off the upper band at the 1.4263 level, that being the 23.6% Fibonacci retracement of the up leg from 1.2951 to 1.4667. The price appears undecided for now as do the short-term oscillators, which display conflicting directional signals.
The MACD is in the positive area but only just above its red trigger line, while the RSI has bounced off its 50 neutral mark, improving marginally. Yet, the stochastic lines have pivoted at the 80 overbought level and highlight a bearish correction. That said traders need to be aware of the still positively charged simple moving averages (SMAs).
Pushing off the mid-Bollinger band at 1.4070, initial restrictions could come at the 23.6% Fibo of 1.4263 coupled with the upper Bollinger band, prior to the 1.4300 and 1.4348 swing highs found overhead. Stretching higher, the 1.4531 and 1.4558 area of peaks could prevent the bulls from extending a rally towards the 1.4650 obstacle, the 50-month top of 1.4667 and the 20 January 2016 peak of 1.4689.
If sellers lead below the mid-Bollinger band, the 38.2% Fibo of 1.4011 and the 1.4000 low may provide the first obstacles to limit the drop. Steering under though could push the price till the 50-day SMA around 1.3898 and the close by key trough of 1.3855. A dive conquering the trough could be tested by the 50.0% Fibo of 1.3808 underneath, before the pair moves to challenge the significant 1.3724 border.
Overall, the very short-term picture remains neutral-to-bullish and a break above 1.4263 or below 1.4000 could ignite the next directional course. That said, the short-term outlook is still bullish above the 1.3855 mark.
