Technical Analysis – USDCAD stands near 33-month low; still strongly bearish

Melina Deltas, XM Investment Research Desk

USDCAD extended its losses and is currently trading not far above the 33-month low of 1.2620 hit on Wednesday.

The bias in the very-short-term also looks bearish as indicated by the RSI which is standing in the negative area. However, the stochastic is indicating an oversold market as the %K and %D line are positively aligned and are both moving above the 20 level.

Further declines may meet support around the multi-month trough of 1.2620. Not far below, support could occur around the 1.2530 barrier, taken from the low in April 2018 before testing the 1.2250 hurdle, registered in January 2018.

On the upside, resistance could occur around the 20- and 40-day simple moving averages (SMAs) currently at 1.2770 and 1.2890, respectively. Higher still, the descending trend line around 1.3030 would increasingly come into scope, ahead of the 1.3174 resistance.

The medium-term picture continues to look predominantly bearish, with trading activity taking place above both the 20- and 40-day SMAs.