USDCAD has experienced significant declines since reaching a sixteen-and-a-half-month high of 1.3793 on May 5th. The pair touched a ten-month low of 1.2859 during Friday of last week.
Delving into the Ichimoku analysis, the negative alignment when the Tenkan-sen line (red) crossed below the Kijun-sen (blue) in late May is still in place. Adding to the bearish signal is the steep negative slope of the Tenkan-sen.
Turning to the RSI, the indicator is well into bearish territory but notice that it has entered oversold levels when it crossed below 30. This might hint to a shift in short-term momentum.
Should the price advance, a resistance area might be formed by the 1.29 handle and the current level of the Tenkan-sen at 1.2951. Bear in mind that the price today momentarily rose above 1.29 before falling back below it. Further up, the area around the 1.30 mark, which was of significance in the past, could provide additional resistance.
On the downside, support could be met around Friday’s low of 1.2859. Additional declines would divert attention to the area around the 1.28 handle (a potential psychological level) for additional support.
The price being far below the 50- and 200-day moving averages suggests a predominantly bearish medium-term picture.
Overall, both the short- and medium-term are currently looking bearish.
