USDCAD has been trading sideways during the last month with an upper boundary the 1.2796 resistance and lower boundary the 1.2649 support. However, despite the neutral outlook there are some positive signs as the pair is trading above its 50- and 200-period simple moving averages (SMAs), with the former crossing recently above the latter, raising hopes that the outlook may soon turn bullish.
Short-term momentum indicators are reflecting a cautiously positive bias as the RSI is found slightly above its 50 neutral mark. In addition, the MACD is found marginally above zero and its red signal line, which might indicate that positive momentum is slowly building up.
Should the bulls manage to cross above the congested region which includes the 1.2784 and 1.2796 hurdles, the pair’s outlook could turn bullish, sending buyers to test the January high at 1.2812. Crossing above the latter might open the door towards the December resistance at 1.2834.
On the flip side, initial resistance might be found at the 50-period SMA currently at 1.2717, before sellers take aim at the 1.2701 barrier. Crossing below this point could send the price towards the congested region which includes the consecutive hurdles of 1.2662 and 1.2649, together with the 200-period SMA. A break below this area could turn the pair’s outlook to bearish, paving the way towards the 1.2563 obstacle.
In brief, the overall outlook for the pair is neutral. For sentiment to change, traders should break above or below last month’s trading range with upper boundary the 1.2796 resistance and lower boundary the 1.2649 support.
