USDCAD extended its losses as the Canadian dollar posted a bullish rally. The pair is falling for the sixth straight trading day and has plummeted more than 2% since December 20. Additionally, the price recorded a new 2-month low at 1.2604 during the European session and slipped beneath the narrow range with an upper boundary at 1.2915 and a lower boundary at 1.2665 in Wednesday’s session.
The range was holding in the last two months and after the drop, the price is testing the 100-day simple moving average (SMA). The aforementioned obstacle is acting as strong support and if there is a failed attempt to fall further, the pair could see a retracement back into the range with the nearest resistance to have in mind at the 50-SMA at 1.2765 on the daily timeframe. On the flip side, a continuation of the aggressive sell-off could drive USDCAD to the 1.2440 support barrier.
Remaining on the short to medium-term timeframe, the MACD oscillator fell below the zero line but is still moving with weak momentum. However, the RSI indicator is painting a more bearish picture as it is fast approaching the 30 oversold level.
Overall, the expectation for the next couple of days is a bearish movement as the hit on the 1.2915 upper boundary which overlaps with the 200-day SMA pushed the price sharply lower and this tendency could continue.