Technical Analysis: USDCAD bears have miles to go before retaking controls
USDCAD bears are yet to provide a convincing sign of return despite Friday’s heavy fall. The 100-DMA, surrounding 1.2620, acts as an immediate hurdle to get more sellers on the board. However, the 200-DMA and an ascending support line from May, respectively around 1.2500 and 1.2420, become crucial challenges for the pair bears. Should USDCAD drop below 1.2420, odds of witnessing the quote’s downside to October month low close to 1.2285 can’t be ruled out. It’s worth noting that the RSI line has a small passage before testing the oversold territory and the MACD is losing the bullish bias, suggesting short-term declines.
On the contrary, the corrective pullback may aim for 23.6% Fibonacci retracement of May-December up, near 1.2740. However, July’s high and a monthly horizontal hurdle, near 1.2810 and 1.2850 in that order, will challenge the USDCAD bulls afterward. Adding to the upside filter is September’s top of 1.2895 and 2021 peak close to 1.2965, not to forget the 1.3000 psychological magnet. That said, the Loonie pair bulls seem to have eased but the bears are yet to justify their strength.