USDCAD is headed to retest the 200-period simple moving average (SMA), after finding a foothold on the cloud’s upper surface and the 100-period SMA around 1.2819. The price bounce came after the 200-period SMA curbed the rally, which started from the near 32-month low of 1.2687. The upturn in the 50-period SMA and the slowing downward pace of the 100-period SMA suggest some improvements in positive sentiment, which may well possibly shove the pair into a sideways market below the capping 200-period SMA.
The short-term oscillators are displaying strengthening positive momentum. The MACD is increasing above its red trigger line in the positive region, while the climbing RSI is returning to the 70 level. Furthermore, the stochastic lines are bullish and the %K line is soaring in overbought territory, promoting more advances in price.
In the positive scenario, attempts to keep the bulls at bay could come from the nearby resistance section of 1.2938-1.2958, which is reinforced by the 200-period SMA. Should this critical border be unable to terminate the recent ascent, the bias may gain optimism shooting the pair towards the next 1.3004-1.3028 limiting band. Overrunning this as well could see buyers extend the climb aiming for the 1.3090 high.
On the other hand, if the bears slip beneath the red Tenkan-sen line at 1.2887, early support may develop from the 1.2854 low ahead of the 1.2819 trough, which is where the blue Kijun-sen line and the 100-period SMA are currently residing. Steeper declines may then challenge the limiting trench of 1.2772-1.2792, which is fortified by the 50-period SMA beneath.
Overall, USDCAD retains a bearish demeanour below the 200-period SMA and the 1.2938-1.2958 highs. That said, a push above 1.3177 could boost the positive picture in the pair.