USDCAD found a strong rebound around the 1.3310 low heading towards the bearish crossover within the 20- and 40-day simple moving average (SMA) to the 200-day one. The RSI bounced off the oversold territory and is pointing south, while the %K line of the stochastic oscillator recorded a bullish cross with the %D line in the negative area.
More advances could find immediate resistance at the SMAs, which are currently hovering near 1.3520. Particularly, a decisive close above this level the bulls are eagerly waiting for a rally towards the 23.6% Fibonacci retracement level of the downward wave from 1.4668 to 1.3310 at 1.3635. Higher, the price may initially stall around the 1.3715 resistance, which holds inside the Ichimoku cloud, before resting near the 38.2% Fibonacci of 1.3832.
To the downside, the 1.3310 nearby support area may add some footing to the market, but a violation at this point may attract much attention towards the 1.3200 handle. Negative momentum could further strengthen if the 1.3100 round number is breached as well, with the 1.2950 likely appearing next in the radar.
Summarizing, USDCAD is expected to show improvement if the price overcomes the 1.3715 resistance zone in the short-term timeframe. In the medium-term, the pair has been in a bearish picture since March 19.
