USDCAD stretched the bearish wave towards 1.3100 on Thursday, the lowest level reached in 4 ½-months, but the RSI and the Stochastics suggest that it’s time for an upside correction as both indicators are currently fluctuating near oversold territory.
The 1.3165 mark could potentially provide immediate resistance if the market attempts to recover. Breaking that line, the bulls should breach the 1.3200-1.3228 area to take the rally towards the 200-day simple moving average (SMA) and the 1.3300 level.
On the downside, the bears would push efforts to clear the 1.3100 handle and meet the January trough of 1.3067. A tougher barrier however is standing between 1.3000 and 1.2970, which if broken could trigger a more aggressive sell-off, turning the medium-term picture even more bearish.
Summarizing, the short-term risk is skewed to the upside, while in the medium-term the outlook remains bearish as long as the pair trades below 1.3300.
