USDCAD bounced up immediately after the dive to a one-month low of 1.2589 on Thursday, with the price currently pushing for an advance above the 1.2700 level and beyond the 20-day simple moving average (SMA).
Although the price has rejected a close below the 50% Fibonacci retracement of the 1.2287 – 12962 upleg, the momentum indicators are still in confusion as the RSI is hovering around its 50 neutral mark, the MACD remains attached to its zero line, and the Stochastics look to be pivoting northwards near their 20 oversold number.
Hence, buyers may wait and see whether the price can sustain its positive momentum above the 1.2700 number before they target the 1.2800 resistance. An extension higher from here could test the tentative descending trendline around 1.2853, a break of which could give the green light for a continuation towards the one-year high of 1.2962. A new higher high above the latter may bolster buying appetite, bringing the 1.3030 barricade next under examination.
A close below 1.2625 could confirm additional declines, though traders may not strongly engage in selling activities unless the price crosses below the 200-day SMA and the supportive trendline drawn from the 2021 low of 1.2006 at 1.2560. If that turns out to be the case, the bearish wave could extend straight to the 61.8% Fibonacci of 1.2500, while lower, a step below the 1.2450 – 1.2430 base could squeeze the price towards October’s low of 1.2287.
In brief, the sideways trajectory in USDCAD is expected to remain intact unless the price rallies above 1.2853 or plummets below 1.2560.
