USDCAD is currently piercing the Ichimoku cloud’s lower surface, while the pair remains confined within a consolidation pattern between 1.2574 and 1.2746. The simple moving averages (SMAs) are reflecting the undecided course in the pair with a bullish crossover of the 100-period SMA around 1.2638, by the 50-period one, while the 200-period SMA is capping improvements in the price.
The directionless Ichimoku lines have yet to signal a strong clear direction, while the short-term oscillators are currently backing the latest negative price action. The MACD, beneath its red trigger line, is sliding into the negative section, while the RSI is declining in the bearish territory. Likewise, the negatively charged stochastic oscillator is promoting an extension of the pair’s recent decline, with its %K line’s plunge into the oversold area.
As things stand, the foundation of the sideways pattern located between the 1.2592 and 1.2574 lows, is providing initial defence towards the fresh price plunge. However, if this border were to break down, the bears could then target the 1.2521 barrier. Further south, the support base residing between the 3-year low of 1.2467 and the 1.2450 trough, identified in February 2018, could challenge sellers’ efforts to resume the downtrend.
If buyers manage to retake control and drive the pair over the cloud, early upside friction could arise at the crossroads of the 50- and 100-period SMAs at 1.2638. Overstepping these frontiers, the bulls may jump for the heavy resistance section of 1.2685-1.2700, containing the 200-period SMA. Conquering this critical obstacle could unleash further gains pressurizing the trading range’s roof of 1.2736-1.2746.
Summarizing, USDCAD remains confined between the boundaries of 1.2574 and 1.2746. A break below the 1.2574 latter level could boost the negative tendencies, while a shift above 1.2746 would be required to reinstate some confidence in the pair.
