USDCAD is retreating after the pullback off the one-year high of 1.2960 after a strong rally from the 1.2600 support level. The flat mode in the RSI indicator confirms the recent weak momentum on price, while the stochastic oscillator is heading south, creating a bearish crossover within the %K and %D lines.
Should selling forces strengthen, the 20-day simple moving average (SMA) at 1.2790 will come under spotlight ahead of the 40-day SMA at 1.2660. Moving lower, the 1.2600 psychological mark could next add some footing ahead of the 200-day SMA at 1.2490, while a break below this significant line would out the recent upside trend under examination.
Alternatively, a close above the one-year high of 1.2960 will brighten the broader outlook, pushing the price towards the 1.3175 key level, which has been frequently tested during November 2020. Beyond that, the rally may gear up to 1.3415.
In brief, USDCAD is facing a weaking bullish bias, where a drop below the 200-day SMA at 1.2490 is expected to enhance selling interest.
