Technical Analysis – USD/CAD capped by 100-day SMA

usd-cadUSDCAD recently redirected back under the mid-Bollinger band and the 50-day simple moving average (SMA), after its progress was curbed by the 100-day SMA and upper Bollinger band. The slipping 50- and 100-day SMAs continue to back the prevailing bearish picture.

The short-term oscillators mirror the increase in negative momentum, suggesting further weakening in price. The MACD, in the positive region, has slipped below its red signal line and is nearing its zero mark, while the downward-sloping RSI continues falling in the bearish section. Moreover, in the oversold territory, the stochastic %K line is sinking further under its red %D line, endorsing additional weakness in the pair.

To the downside, early support may originate from the 1.3126 barrier and the adjacent lower Bollinger band. If selling interest were to continue, the near eight-month bottom of 1.2993 and neighbouring 1.2950 crucial barrier – stretching back to December 31 – could challenge the decline. Should the pair re-activate the downtrend from 1.4667, it may steer for the 1.2884 level – reached in October 2018 – before diving deeper towards the 1.2782 and 1.2728 lows, from October and May 2018, respectively.

If buyers manage to drive the price back up, initial resistance may develop from the 50-day SMA at 1.3223 and the mid-Bollinger band at 1.3280 ahead of the 1.3340 high. Overrunning these obstacles, the 100-day SMA at 1.3384 may attempt to impede the price from testing the 1.3420 peak and upper Bollinger band overhead. Failure to defend the negative structure could then see the price jump towards the 1.3500 handle. Higher, the 200-day SMA at 1.3553 may challenge buyers’ efforts to stretch towards the 1.3600 and 1.3645 tops.

In brief, should the pair remain below the SMAs and the 1.3420 mark, a predominant bearish picture may command the short-to-medium-term timeframe.

Origin: XM

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