Technical Analysis – USDCAD edges marginally up as progress remains capped

Melina Deltas, XM Investment Research Desk

USDCAD has been nicely hovering above the 1.3350 support level but is capped by the 20-day simple moving average (SMA).

From a technical perspective, the short-term bias is viewed as positive, reflected by the improvement in the RSI and the stochastic. Yet only a decisive close above the nearby resistance of 1.3418 can boost buying pressure towards the 1.3460 barrier. Stretching further, the bulls may next stop near the 1.3500 psychological mark.

In the event of a downside reversal below 1.3350, the 23.6% Fibonacci retracement level of the up leg from 1.2993 to 1.3418 at 1.3317 may ease selling pressure. Failure to bounce on the lattercould bring the 1.3260-1.3270 support area into view ahead of the 38.2% Fibo of 1.3255.

In the bigger picture, the market continues to print higher highs and higher lows, holding the positive outlook intact. A drop below the 61.8% Fibonacci of 1.3155 would disturb the bullish pattern, shifting the outlook to neutral.

Summarizing, USDCAD has the potential to gain additional ground. A climb above the two-month high is expected to trigger the next upside move.