USDCAD came close to break the 23.6% Fibonacci retracement level of the down leg from 1.4668 to 1.3310, around 1.3635, several times in the preceding week without success. Still, it managed to hold above the 200- and 20-day simple moving averages (SMAs).
The market could retain the range-bound trading in the short-term as the RSI is standing near its 50 neutral mark and the MACD is moving along its trigger line and towards zero. However, the %K line of the stochastic oscillator is approaching the overbought zone, suggesting some gains.
In terms of trend, the bearish direction could stay in place since the price continues to fluctuate below the Ichimoku cloud.
Should the pair stretch north, surpassing the 23.6% Fibo, the 40-day SMA at 1.3750 could provide immediate resistance before the pair touches the 38.2% Fibo of 1.3832 and the 1.3850 barrier. If traders continue to buy the pair, the price could rise towards the 50.0% Fibo of 1.3990.
On the flip side, the 20-day SMA currently at 1.3540 and the 200-day SMA at 1.3495 may halt downside movements as they did earlier this week. A significant step lower could bring the bearish sentiment back into play, sending the price probably until the three-month low of 1.3310. If the sell-off extends, attention could then turn to the 1.3200 psychological level.
In the medium-term picture, USDCAD has been trading bearish in the past three months after the close below the more than four-year low of 1.4668. If the pair manages to cross above the 61.8% Fibo of 1.4150, the negative outlook could switch into a neutral one.
To sum up, the market is expected to hold neutral in the very short-term and bearish in the medium-term.