USDCAD is opposing the overwhelmingly bearish picture with its recent bounce off a newly formed 3-year low, between the troughs of 1.2450 and 1.2527. The pause in the falling Ichimoku lines is reflecting the recent rebound in the price, while the sliding simple moving averages (SMAs) are safeguarding the prevailing negative tone.
The short-term oscillators are reflecting mixed signals in directional momentum. The MACD, in the negative region, is holding below its red trigger line, while the RSI’s bounce ahead of the 30 level is finding difficulty to improve further. However, the stochastic oscillator has become bullish out of the oversold region and is promoting additional advances in the price.
If the pair’s foothold at 1.2467 gains more traction, resistance could originate around the 50-day SMA at 1.2725, in-line with the cloud’s lower surface. In the event buyers push over these obstacles, they could face a heavy boundary at 1.2832-1.2880 – an area which also includes the 100-day SMA. If this durable border fails to impede price improvements, the bulls could then challenge another key resistance band from 1.2955 to 1.2993.
If selling interest intensifies, first downwards limitations could arise from the support zone of 1.2527-1.2450 where the 3-year low also resides. A violation of the multi-year bottom of 1.2467 and the latter level of 1.2450 may restart the pair’s drop into deeper waters meeting the 1.2378 barrier. If the plunge persists, then the bears could target the 1.2248 trough from January 2018.
Summarizing, USDCAD retains a dominant bearish bias beneath the SMAs and the cloud. A shift in the price above 1.2832-1.2880 could shine some light onto a gloomier picture and start to undermine price’s bearish shackles.