USDCAD plummeted almost 1% in the previous two trading days and this weakness has taken the price to a fresh three-month low of 1.2354. The pair has seen a strong sell-off since the aggressive bearish run started on December 19.
In the daily timeframe, significant obstacles have been broken, such as the consolidation area of 1.2590 – 1.2915, the 38.2% and 50.0% Fibonacci retracement levels of the last big up-leg with the low at 1.2060 and the high at 1.2915, as well as the 1.2450 barrier, which was acting as a support level before the penetration.
During the decline, the price touched the 61.8% Fibonacci level at 1.2386, and paused the sharp fall, as the price is trying to recover from weakness. If the price moves higher, it could hit the 1.2450 resistance level and the 1.2500 strong handle.
Conversely, a drop beneath the 61.8% Fibonacci level could push the pair towards the 1.2240 support level or moreover, until the 1.2060 barrier. In the near-term, the 20-simple moving average is sloping to the downside confirming the recent bearish movement as well as the 50-SMA in the medium-term is moving south. Additionally, in the short to medium term time frame, the MACD and the RSI indicators are holding within the oversold areas, signaling further downward pressure.