USDCAD has been in a consolidation phase during the last two weeks. The market is soft and is trapped between the 50 and 200-day moving averages. Trend signals are weak and momentum is neutral.
The recent bullish bounce found resistance at the 50% Fibonacci of the decline from 1.3793 to 1.2061. Prices are currently pivoting around the 38.2% Fibonacci level in the mid-1.2700 handle. If the market can re-test the 50% Fibonacci (1.2922), prices would meet further resistance at a very key psychological level at 1.3000, near the 200-day MA. Rising above this area would shift the market’s focus to the 1.3500 level, bringing the 1.3793 peak into sight. From here the market would resume the longer-term uptrend.
A break below support at 1.2500 would set USDCAD on the path to re-test the September 8 low of 1.2061. From this point, an extension lower would confirm the resumption of the downtrend from 1.3793.
The bias is expected to remain neutral in the near-term. Only a move above 1.3000 would invalidate the broader bearish trend from 1.3793.
