USDCAD’s recent positive impetus off a multi-year low has been muted by the Ichimoku lines, while the capping 50-day simple moving average (SMA) and the lingering Ichimoku cloud overhead have once again guided the pair downwards. The Ichimoku lines are promoting negative momentum, while all SMAs are reinforcing the bearish structure.
Positive sentiment seems to remain subdued, something also being reflected in the short-term oscillators. The MACD, although flattening, is south of the zero threshold and remains below its red trigger line, while the RSI is struggling to improve in the bearish territory. However, the stochastic oscillator is still endorsing price gains and has yet to confirm waning in the pair’s recent traction off 1.2365.
If the Ichimoku lines manage to keep price improvements at bay, initial support could come from the 37½-month low of 1.2365. Diving beneath this will revive the broader negative bias and may pilot the pair towards the key February 2018 trough of 1.2250 ahead of the 1.2195 low. Snowballing from here, the price may aim for the 1.2118 low and the vital trough of 1.2060 – both identified in September of 2017.
In the event buying interest increases, the area between the Ichimoku lines from 1.2523-1.2556 and the adjacent 1.2589 barrier, could impede the price from challenging the 50-day SMA at 1.2649. Further efforts to improve may be futile as the bulls will need a more profound push to overcome the heavy cloud and the 1.2762 high, reinforced by the 100-day SMA overhead at 1.2781. Yet, successfully doing so, buyers may then examine the next resistance at the 1.2880 high.
Summarizing, USDCAD seems suppressed by bearish pressures, which continue to dictate a downward direction in the pair. Any efforts to tilt the picture positive may be pointless unless they extend past the 1.2880 high.
Written by Admin
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