USDCAD lost around 1.20% this week to fall back below its 20- and 50-day simple moving averages (SMA) and into the Ichimoku cloud, while the momentum indicators turned bearish, flagging further weakness ahead. The MACD entered the negative zone, deviating further below its red signal line, and the RSI slipped under its 50 neutral mark.
The price, however, is currently testing the lower Bollinger band and is not far above the ascending line drawn from the 1.3067 bottom, a signal that further declines may be limited. Piercing the line at 1.3320 and dropping under the cloud, the 200-day SMA – currently at 1.3270 – could be the next target. Even lower, bearish action could extend until the 1.3200 psychological level.
In case of a rebound, the market may find a cap around 1.3445 before heading up to the 1.35 level. Above the latter, the bulls would push hard to finish the session on top of the 1.3563 peak and reach the 1.36 mark.
Meanwhile in the medium-term picture, which looks at the three-month performance, the outlook switched back to neutral following the slide below 1.3500.