USDCAD has retreated from its January high amid strengthening negative momentum, and is currently found near its lower Bollinger Band indicating that an immediate upside movement should not be ruled out. Moreover, the pair’s 50-period simple moving average (SMA) has recently crossed below its 200-period SMA, increasing fears of a sustained bearish outlook.
Short-term momentum indicators are supporting a negative bias as the RSI is located below its 50 neutral mark. Also, the MACD is found below zero and its red signal line, which could indicate that the negative bias might be gaining more traction.
Should the bears remain in charge, initial support might be found at the 1.2544 hurdle. A decisive move below this point could increase selling pressures further, opening the door towards the mid-November low at 1.2492. A break below the latter could shift sellers attention towards the early-November high at 1.2478.
On the flip side, if the price crosses above the 1.2606 level, resistance might then be found at the 1.2620 hurdle. Crossing above the latter could send the price towards its 50-period SMA currently at 1.2689. A break above that point could turn the fortunes around for the pair, paving the way towards the 1.2713 obstacle, before the bulls eye the 1.2763 barrier.
In brief, the overall outlook for the pair is bearish. For sentiment to change, sellers would need to break above the 50-period SMA.
