USDCAD’s rebound looks fragile near long-term trendline

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USDCAD is pushing efforts to return above the long-term support trendline drawn from the trough of 2017 after rebounding on the three-month low of 1.3041. But the technical indicators have yet to send a clear bullish signal as the RSI is struggling to cross above its 50 neutral mark even though the MACD keeps rising above its signal line, while the red Tenkan-sen is flattening under the blue Kijun-sen line.

The 1.3130 level is the nearest barrier to downside corrections at the moment, while lower, the 1.3041-1.3015 area could be retested ahead of the 1.2965-1.2920 support zone, turning the medium-term picture from neutral to bearish if significantly breached.

Should the bulls return to the game, piercing the bottom of the Ichimoku cloud and the 1.3200 level that proved a strong resistance earlier this week, the way could open towards the 200-day simple moving average (SMA) currently around the 38.2% Fibonacci of 1.3265 of the downleg from 1.3663 to 1.3015. Breaking that too, the rally may next stall around the tough 50% Fibonacci of 1.3340.

Summarizing, the latest rebound in USDCAD continues to look choppy and any failure to close decisively above the long-term trendline could send the pair south, where any decline below 1.3015 would also change the neutral medium-term picture to a negative one.

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