USDCAD changed direction, heading to the downside, in the very short term over the last couple of daily sessions after finding strong resistance on the new 19-month high of 1.3663 last week. However, currently, the price remains above the near-term ascending trend line, which has been in place since October 10 and holds around the 20-day simple moving average (SMA).
The technical indicators are still located in bullish area, with the MACD is slipping below its red signal line and the RSI is approaching the neutral area with strong momentum. Both are suggesting that the upside rally may be overdone, and negative corrections are taking place.
More negative movements could send prices towards the immediate support zone around 1.3445 before challenging the short-term uptrend line around 1.3355, which stands near the 40-day SMA. Moving lower, the focus would shift to the 23.6% Fibonacci retracement level of the upleg from 1.2060 to 1.3663 near 1.3286. A penetration of the diagonal line could turn the upside tendency to a more bearish one turning the attention to the 1.3160 support.
On the other side, the market could rebound on the 20-day SMA and send prices until the multi-month high of 1.3663. If bullish forces appear even stronger, 1.3790 should be another resistance to keep in mind.
Overall, in the bigger view, USDCAD has been trading in an ascending movement since September 2017 following the bounce off the bottom of 1.2060.
Origin: XM
