USDCAD switches to neutral above tentative up trendline

USDCAD shifted south to re-challenge the 1.3300 level after the bottom of the Ichimoku cloud halted the selling pressure but the positive traction was not strong enough to send the price above that mark.

In momentum indicators, the RSI and the MACD are currently painting a neutral picture for the short-term as long as the former moves around its 50 neutral mark and the latter fluctuates around its zero and signal line.

The lower surface of the cloud and the tentative up trendline stretched from the low on November 29 will be closely watched if the bears return to the game as the area also encapsulates the 23.6% Fibonacci of 1.3259 of the upleg from 1.3041 to 1.3326. Failure to hold above that barrier could see the price easing towards the 1.3235-1.3215 region, where the market found both support and resistance in previous sessions. Lower, a more important obstacle could be detected around the 200-period SMA and the 50% Fibonacci of 1.3182.

Alternatively, the pair should rally above the 1.3300 number and more importantly close decisively above the 1.3340 ceiling to increase buying interest in the market. In case it successfully breaches the latter, all attention will turn to the September high of 1.3381, where any significant violation would reactivate July’s uptrend.

Summarizing, USDCAD is looking technically neutral in the short-term, with the area around 1.3259 and the 1.3300 number expected to restrict downside and upside corrections.