USDCAD is pushing for a close above the long-term ascending trendline drawn from September 2017, which could also drive the price out of the 5 ½-month old downward-sloping channel, following the bounce within the 1.3040-1.2985 area.
Should the pair break significantly above the channel and the 20-day simple moving average (SMA), the bullish action could stretch towards the 50-day SMA currently at 1.3350, where the 61.8% Fibonacci of the 1.2556-1.4667 upleg (2018-2020) happens to be. Higher, resistance could next emerge somewhere between the 200-day SMA at 1.3550 and the 50% Fibonacci at 1.3590.
The short-term bias, however, is looking bearish-to-neutral as the RSI has rebounded off 30 but is still below its 50 neutral mark, while the MACD seems to be regaining strength above its red signal line, though within the negative zone. Moreover, the bearish crosses between the SMAs are still intact, underpinning the market’s downward pattern. Hence, whether the price can exit the channel and sustain strength above it remains to be seen.
In case the bears take control, the spotlight will turn back to the 1.3040-1.2985 zone, with the 2019 bottom at 1.2950 also attracting attention. Breaching the latter, the sell-off could test the 1.2880 barrier ahead of the 1.2760 hurdle, both being key support levels during 2018.
Summarizing, USDCAD is expected to hold a bearish-to-neutral short-term bias as long as it fluctuates within the descending channel.
Note that Canadian and US employment reports are coming out today at 12:30 GMT.
