Tue, May 30, 2023 @ 10:34 GMT
HomeContributorsTechnical AnalysisUSDCAD Trickles Toward SMAs as Sellers Retake Control

USDCAD Trickles Toward SMAs as Sellers Retake Control

USDCAD is extending its retreat from the recorded 17½-month high of 1.3076, heading lower towards the converged simple moving averages (SMAs), which are not now endorsing any sturdy price trend. The pair has retracted within the region of a trading range that had lingered for a period of nearly ten months.

The short-term oscillators are reflecting the increase in negative momentum. The MACD, in the positive area, has distanced itself below its red trigger and is approaching the zero mark, while the RSI is falling in bearish territory. Moreover, the renewed negative charge of the stochastic oscillator is promoting additional downward price action in the pair.

To the downside, an initial fortified support section from the 1.2718 barrier until the inside swing low of 1.2646 exists. This includes all the SMAs and the lower Bollinger band and could prove to be a difficult task for sellers to accomplish. However, if this upside defence fails to dismiss selling intentions, the price may then tumble towards the April 21 trough of 1.2457, simultaneously testing the 1.2450 support too. In the event bearish pressures continue to overwhelm, the 1.2402 low and the adjacent 1.2351-1.2386 support band could draw traders’ attention.

On the flipside, if buyers unearth some positive traction somewhere within the 1.2646-1.2718 support zone, resistance could commence from the 1.2762 obstacle before the price jumps to test the resistance region linking the mid-Bollinger band at 1.2865 with the 1.2920 inside swing low. Breaching this, not too far above the 1.2981 high may come into play. Further hikes in the price may then encourage the bulls to aim for the upper Bollinger band at 1.3042 before challenging the 1.3076 peak and the 1.3112 high, where selling in the pair intensified back in November 2020.

Summarizing, USDCAD’s recently readopted bearish tone is weighing on the directionless SMAs. For positive developments to remain on the table, the price would need to hold north of the SMAs. A climb above the 1.2900 handle could boost buying interest, while a close below the SMAs may reinforce negative tendencies in the pair.

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