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Technical Analysis – USDCAD bounces off medium-term uptrend line

  • USDCAD recovers some ground above 1.3600

  • Oscillators suggest upside correction in short-term

USDCAD has gained little over the last couple of sessions, and it managed to hold above the medium-term ascending trend line and re-enter the 1.3600 areawith the technical oscillators feeding prospects for possible positive short-term trading; the RSI is moving sideways slightly beneath its trigger line, while the stochastic posted a bullish crossover within its %K and %D lines in the oversold area. Yet, the pair is facing strong resistance near the 50-day simple moving average (SMA).

A failure to overcome the 1.3630 barrier could send the price down to 1.3590, a challenging point over the last three months. Lower, support could be next found around 1.3570 where the 200-day SMA is currently positioned, while a decisive close below this line could stage a steeper sell-off.

Alternatively, if 1.3630 proves easy to get through, the spotlight will turn to the 20-day SMA at 1.3675. On top of that, the bulls would need to clear the 1.3785 barricade to push the rally towards the previous peak of 1.3845, the highest level reached since November 14.

In the short-term picture, USDCAD is trying to turn positive after the rebound off the uptrend line. Should the market continue the medium-term upward pattern, the outlook may turn brighter. A run above 1.3845 could switch the outlook to strongly bullish.

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