USDCAD Finds Footing at Multi-Year Lows; Pauses its Descent

Technical analysis of Forex market

USDCAD is consolidating in the vicinity of the 34-month low of 1.2580. The Ichimoku lines are reflecting the pause in negative momentum, while the falling 50- and 100-period simple moving averages (SMAs) are promoting further deterioration in the price.

The short-term oscillators are conveying mixed signals in directional momentum. The MACD, in the negative region, has stepped above its red trigger line, while the downwards sloping RSI is holding in the bearish territory. The stochastic oscillator is bullish out of the oversold area and is indicating a pickup in sentiment.

If the price pushes above the red Tenkan-sen line at 1.2618, initial tough resistance could arise from the 1.2653-1.2670 region, which encapsulates the 50-period SMA and the flattening blue Kijun-sen line. Overcoming this heavy border, buyers may then tackle the Ichimoku cloud before facing significant obstruction from the 1.2713-1.2730 zone, which includes the 100- and 200-period SMAs.

In the negative scenario, instant downside limitations originate from the 1.2580-1.2588 support base. If sellers manage to successfully dive below this hardened floor, the 1.2547 and 1.2526 troughs from April 2018 respectively could attempt to dismiss the decline. However, sinking further, the pair may then target the 1.2450 boundary from February 2018.

Overall, USDCAD maintains a neutral-to-bearish tone below the SMAs and the 1.2653-1.2670 barrier. Yet, tilting the outlook increasingly negative is the bearish crossover of the 200-period SMA by the 100-period one.