USDCAD has been in a downtrend since May. Yesterday the pair declined by a sizable 1.4%, reaching 1.3012 at its lowest, a four-month low. Should it finish the day lower, it would mark the fourth consecutive day of declines for the pair.

The RSI is projecting a negative short-term picture. The indicator is deep into bearish territory at 28. The MACD histogram supports this negative view, as it is below zero and the red signal line. It should be noted though, that RSI has entered oversold levels by crossing below the 30 level. This renders a reversal possible as well.

If the price advances, the area around 1.3070, which was of significance in the past, could provide resistance. A successful break above this area would bring the 1.31 handle, a potential psychological barrier, into perspective.

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Should the price continue declining, yesterday’s low of 1.3012 could act as support. Notice that the price is currently close to this point. Below this, the eight-and-a-half-month low of 1.2968 from January 31 might offer additional support.

Turning to the medium-term picture, the contraction over the last couple of months has more or less offset the pair’s gain during the first months of the year, setting a neutral outlook. Further supporting this is the 200-day moving average line, which is more or less flat at the moment.

Overall, the near-term bias is bearish and the medium-term is neutral.

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