USDCAD has marked yet more higher highs and higher lows since mid-January as bullish forces linger. Moreover, the 50-period simple moving average (SMA) is closing the gap with the 200-period SMA, and if the former manages to cross above the latter, it would reinforce the case of a sustained bullish outlook.
Short-term momentum indicators are reflecting a mixed picture as the RSI is hovering slightly above its 50 neutral mark. However, the MACD is found below its red signal line despite being in positive territory, which indicates that the positive momentum might be losing steam.
Should the bulls maintain control, the December support at 1.2763 might be the first line of resistance, before buyers shift their attention towards the 1.2796 hurdle. A decisive move above the latter could mark yet another higher high, strengthening the pair’s positive momentum, which could send the price to test its 1.2812 and 1.2834 obstacles, consecutively.
On the flip side, initial support might be found at the 200-period SMA currently at 1.2693 before sellers eye the region which includes 1.2654 level and the 50-period SMA currently at 1.2646. A break below the latter could intensify selling pressures, opening the door towards the December support at 1.2620. Crossing below this point, sellers might then target the 1.2563 obstacle.
In brief, the short-term outlook for the pair is cautiously bullish. For sentiment to change, buyers would need to break below the 50-period SMA.
