USDCAD has been on the sidelines over the last four months as 1.3700 seems to be a real struggle for the bulls. In the near-term, the market is losing steam but the bounce off 1.3225 remains on cards.
Technically, the RSI is changing direction to the downside and towards its 50 neutral mark, while the stochastics are dropping from the overbought region after the %K and the %D lines posted a bearish cross. Also, the 20- and the 50-day simple moving averages (SMAs) recorded a bullish crossover in the short-term.
A potential rebound off the 1.3520 support may keep the upside move with the next obstacle coming from the 1.3700 and 1.3800 psychological marks. Higher, the peak of 1.3975 may also prove a challenge.
Alternatively, a decline under 1.3520, could meet a strong barrier between the 20- and the 50-day SMA at 1.3460. Even lower, the 200-day SMA at 1.3280 and the lower boundary of the trading range at 1.3260 could halt declines. Any movements beneath 1.3225 could shift the outlook to bearish.
In the medium-term picture, USDCAD is holding within a consolidation area with upper boundary the 1.3700 mark and lower boundary the 1.3260 support. A move above or below the aforementioned levels could dictate the directional tendency.
