USDCAD looks to be flat over the last two weeks but is now penetrating the 23.6% Fibonacci retracement level of the down leg from 1.4170 to 1.3315 at 1.3518, inside the Ichimoku cloud. Also, the price holds beneath the 20- and 40-period simple moving averages (SMAs), confirming the neutral bias and the RSI is keeping some distance from the 50 level, pointing down. However, the stochastic oscillator is completing a bullish crossover within its %K and %D lines in the oversold zone.
A reversal to the downside could stall at the lower surface of the cloud at 1.3500 and any violation at this point could potentially trigger a sell-off in the market, probably leading the price down to 1.3360 and the three-month trough at 1.3315.
In the positive scenario, where the price extends above the moving averages, it could hit the 38.2% Fibo of 1.3643. If the market manages to overcome that area traders could look for resistance at the 1.3685 barrier before steeper bullish actions take the price up to the 50.0% Fibo of 1.3745.
Regarding the medium-term picture, the bearish outlook has built up as the market continues to lose ground.
To sum up, the short-term bias is neutral though the pair could be close to oversold levels.
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