USDCAD has been underperforming in the past two days, following the rebound on the 1.3000 strong psychological level on Tuesday. The pair plunged below the 50.0% Fibonacci retracement level of 1.2925 of the downleg from 1.3800 to 1.2060 and is developing below the 20- and 40-simple moving averages (SMAs) in the short-term as well.
Looking at the daily timeframe, the MACD oscillator slipped below its trigger line in the positive area, while the RSI indicator fell in the negative zone but lost some of its strengthening bearish momentum. Both are confirming the scenario of further declines in price action.
Should prices continue to move lower, immediate support could come at 38.2% Fibonacci retracement level of 1.2720. A drop below this area would take the price to the next low of 1.2530 and significantly weaken the bullish medium-term structure.
In the event of an upside reversal, the 50.0% Fibonacci mark at 1.2925 could act as a barrier before being able to re-challenge the 1.3000 handle. A climb above this significant region would open the way towards the 1.3130 resistance level, taken from the peak on March 19, which overlaps with the 61.8% Fibonacci.
Turning to the medium-term picture, the pair has been trading within a rising sloping channel since September 2017, failing several times to exit from this range.
