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USDCAD Turns Neutral, Big Picture Remains Bearish

USDCAD is fading the recent rally from the 1.2061 low and is entering a consolidation phase around the 50-day moving average. The underlying bearish trend remains intact but a neutral bias is expected in the near term.

A break below the 50-day MA at 1.2454 would find additional support at 1.2420. Near-term risk is tilted to the downside and further weakness in the market could see prices push lower towards the September 8 low of 1.2061. Beyond this point, the market would see a resumption of the downtrend from May.

To the upside, resistance is expected between 1.2600 and 1.2770. Another push higher would open the way towards the key psychological level at 1.3000 ahead of the May 5 peak of 1.3793.

Daily price action looks soft overall after the recent rebound off 1.2061 has stalled, raising the probability of another lower low put in place, to continue the pattern of USDCAD’s decline from 1.3793. The crossover of the 50-day MA below the 200-day MA gave a bearish signal.
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