USDCAD is once again making efforts to improve by prodding above the Ichimoku cloud and the 100-period simple moving average (SMA) to face the 1.2400 handle in a ranging market environment that has lasted for a little more than two-weeks. The lagging longer-term oscillators are still sponsoring the negative picture, while the recent upturn in the 50-period SMA is reflecting buyers’ battle to regain a slight lead.
The Ichimoku lines are indicating that driving forces have lost their potency and are not promoting a clear direction, reflecting the recent sideways price action. However, momentum indicators are starting to pick up. The rising RSI and the positively charged stochastic oscillator are mirroring the latest uptick in the price, while the MACD is demonstrating how negative momentum has been dwindling.
Clearly overstepping the 1.2400 hurdle, the price could then tackle the nearby ceiling of the minor range of 1.2422-1.2433 (previous support-now-resistance), an obstacle that took shape around the early part of July. Successfully breaking above this, the price may jump to challenge the 1.2495-1.2525 resistance barricade prior to meeting the 1.2558 high.
Alternatively, if sellers resurface and drive the price lower, an initial zone of support could develop between the 100-period SMA at 1.2382 until the low at 1.2351. Diving below this critical obstacle, the pair may stall around the 1.2327 lows before testing the 1.2287-1.2310 support barrier. If selling interest intensifies, conquering the 1.2251-1.2271 boundary, the bears could then turn their focus towards the 1.2203 obstacle.
Summarizing, USDCAD is consolidating between the lower limit of 1.2287-1.2310 and the upper limit of 1.2422-1.2433. For a definitive direction to evolve, the price would need to pilot either below or above these mentioned limits
