USDCAD appears to have declared a negative route below the descending line drawn from the 50-month peak of 1.4667. The bearish tone of the 50- and 100-day simple moving averages (SMAs) and the falling mid-Bollinger band (20-day SMA), which has merged with the diagonal line, further aid the broader negative outlook.
The short-term oscillators are uttering temporary mixed signals in directional momentum. The MACD, in the negative region, is marginally above its red signal line as they both follow a horizontal path. The RSI is dipping in bearish territory towards the 30 mark, while the stochastic %K line completed a bullish crossover at the 20 level, endorsing improvements in the pair.
If the pair experiences extra weakening, limitations may develop from the lower Bollinger band around the immediate 1.3100 – 1.3232 support region. Successfully falling under this, the price could then rest at the 1.3028 low before testing the 14½-month bottom of 1.2950. Should the pair deteriorate even below this critical trough, sellers may target the key 1.2884 barrier from October 2018.
Otherwise, resistance may originate from the 1.3244 obstacle ahead of the fortified trend line. A break above the mid-Bollinger band (diagonal line), could accelerate the price towards the 1.3398 high and the heavy resistance section of 1.3450 – 1.3490 overhead. Overtaking this zone, which encapsulates the 50-day SMA and the upper Bollinger band, the 200-day SMA at 1.3542 could challenge the climb. Additional gains may then meet the 1.3645 border ahead of the 100-day SMA at 1.3671.
Summarizing, a negative scenario prevails in the short-to-medium-term outlook. Yet a break above the trend line could undermine the bearish picture.
