USDCAD has found some footing at the 100-day simple moving average (SMA) residing at the 1.3724 key trough, following a break of the foundation of a trading range that commenced around early April. The price has been weakening ever since it tested the ceiling of the horizontal market at 1.4264, backed by the intact negative Ichimoku lines. Promoting additional weakening in price is the declining 50-day SMA and the MACD, which is falling below its red signal line in the negative zone.
That said, the RSI, though flat in the bearish region, is starting to improve while in the oversold territory the %K line is nearing a bullish overlap of its red %D line, which may endorse advances. Traders also need to be aware of the predominant bullish tone of the 100- and 200-day SMAs assisting this view.
Should buyers’ foothold be adequate, initial resistance may originate from the 1.3809 level – that being the 50.0% Fibonacci retracement of the up leg from 1.2951 to 1.4667 – and the 1.3850 obstacle (previous support-now-resistance). Moving higher, if the lower surface of the Ichimoku cloud around 1.3933 fails to halt the climb, it could be challenged by the resistance region from the 38.2% Fibo of 1.4012 to the 1.4047 high, which encompasses the 50-day SMA as well. Overrunning this border, the 1.4173 and 1.4140 highs that capture the upper band of the cloud may apply the brakes.
To the downside, immediate support may occur at the 100-day SMA at the trough of 1.3724 ahead of the 1.3681 barrier. If selling interest persists, the pair could rest at the 61.8% Fibo of 1.3608 before it meets the 1.3517 obstacle and the 200-day SMA at 1.3469 underneath.
Summarizing, the short-term bearish picture may be at risk if the price remains above 1.3724, and a shift over 1.3850 may see a neutral-to-bullish bias return.