USDCAD gave up last week’s gains and slumped below the 200-day moving average (SMA) and towards a more than a three-month low of 1.3231 on Thursday. According to the RSI and the fast Stochastics, the market could turn even bearish in the near-term as both indicators are sloping downwards and are still above oversold territory.
The spotlight is currently turned to the 1.3200 support level. Should the price break that barrier, selling pressure could intensify until the 1.3111 trough and then down to the 1.3067 bottom.
A strong bounce above the 200-day SMA and higher than the 1.3300 round mark would likely detect resistance near 1.3365, where the 50% Fibonacci of the 1.3663-1.3067 downleg is also placed. A rally above the Ichimoku cloud and the 50-day SMA, which appeared somewhat restrictive recently, could prove more valuable to the market.
In the medium-term picture, USDCAD maintains a neutral profile as it continues to range within the 1.3200 – 1.3563 area. The lack of direction in the 50-day SMA is giving little hope for an outlook improvement.
Summarizing, the short-term risk is tilted to the downside, while in the medium-term the outlook remains neutral.
