USDCAD looks to be creating a floor below the eight-month high of 1.3463 and near the 61.8% Fibonacci retracement level of the down leg from 1.3664 to 1.2950 at 1.3390. Furthermore, the price remains well above the penetrated falling trend line, signaling more upside pressure in the short-term.
The technical indicators seem to be losing momentum in the daily timeframe. The RSI is moving slightly to the downside in the positive territory, while the stochastic is flattening after it posted a bullish crossover on the neutral zone.
Traders, however, would be more eager to engage in buying activities if the price manages to surpass the nearby resistance at 1.3463. If this is successfully breached, then the rally may next rest somewhere near the 1.3564 barrier, taken from the peaks on May 31, while a closure above it may be needed to push the price towards the 19-month high of 1.3664, achieved on December 31.
On the flip side, if the selling pressure accelerates again and the market deteriorates below the 61.8% Fibo of 1.3360 former support area, it could slip towards the 50.0% Fibonacci, which stands near the 1.3310 level and the 20-day simple moving average (SMA). Such a move could next bring the 38.2% Fibo of 1.3220 under the spotlight, which is slightly below the 40-day SMA. If this level is violated, it could trigger sharper losses probably towards the 1.3200 handle.
Summarizing, USDCAD is expected to show improvement if the price overcomes the eight-month peak of 1.3463. In the medium-term a stronger push up above 1.3664 is required to upgrade the positive outlook.
Origin: XM
