USDCAD Seeks More Upside; 1.2875 in focus

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The USDCAD has been confined to the 1.2859 – 1.2875 area for the past three days, but its short-term outlook continues to look promising.

In particular, the MACD remains positively charged above its signal and zero lines, while the rising RSI has yet to reach its overbought mark of 70, both suggesting that the week’s impressive rally last from 1.2516 could gain more ground. On the other hand, Stochastics have pivoted south, though the indicators remain above their 80 overbought level for now, keep the bias on the bullish side for now.

If the 1.2875 Nearby resistance gives way, the number 1.3026, which straddles the 200-week simple moving average (SMA) and the 38.2% Fibonacci retracement of the 2020 downtrend, may attract some attention before the Spotlights only turn to the May high of 1.3075. Should the bulls pick up speed from here, the 50% Fibonacci of 1.3340 and the 1.3380 barricade in the second half of 2020 could be the next hurdle.

In case the buying pressures fade away immediately, the pair will once again seek shelter around 1.2859. Slightly lower, the 1.2800 mark will be watched ahead of the psychological level of 1.2700, a break of which could bring the 200-day SMA and the 23.6% Fibonacci level of 1.2638 under scrutiny.

In summary, USDCAD’s advance could extend further in the near term, likely highlighting the May high unless 1.2875 remains firm.

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