USDCAD is neutral in the near-term and pivoting around the key 1.3700 level. After rallying to a more-than 14-month high of 1.3792 on May 5, the market corrected and edged lower to find support at 1.3638. This support has held since May 5 and could lead to prices rebounding to re-test the 1.3792 high.
The medium-term outlook is bullish especially after USDCAD broke above the key 1.3500 level on April 24. The technicals are supporting a bullish picture. MACD is above zero and the RSI is above 50, so both indicators are in bullish territory. However, the RSI is trending down, which points to fading upside momentum. The overall bullish bias in the market could limit the corrective pressure.
If support at 1.3638 fails to hold, then prices would target 1.3600 (a December high) and below this there is important support at 1.3300, an area which saw some congestion from mid-March to mid-April. A drop below 1.3300 would shift the trend to bearish, with scope to target 1.3000. Such a move would see USDCAD retracing all of the gains made since rising in February.
Origin: XM
