USDCAD seems to be pursuing its proclaimed bearish direction, something also conveyed through the dominant negative bearing within the simple moving averages (SMAs). The short-term oscillators as well as the falling Ichimoku lines deliver a negative demeanour reinforcing this view.
The MACD, some distance in the negative region, is decreasing below its red signal line, while the RSI is slipping further in oversold territory. Moreover, the stochastic oscillator has retreated into the oversold zone, promoting further losses in the pair.
To the downside, sellers may be initially challenged by the 1.2975 barrier of January 8 ahead of the nearby 1.2951 year end low, identified on 31 December 2019. Should the pair weaken further, the 1.2915 obstacle from October 2018 may come into play, prior to the 1.2886 border.
If buyers resurface, early limitations may arise from the 1.3046 inside swing low, coupled with the red Tenkan-sen line. Pushing higher may encounter some friction from the blue Kijun-sen line at 1.3097 ahead of a resistance band from 1.3125 – 1.3132. Nudging above this, the 50-period SMA at 1.3144 and the 1.3165 high may prevent the climb from testing the cloud and 100-day SMA around 1.3197. Should the cloud and neighbouring diagonal line – drawn from 1.4667 – fail to dismiss further advances, the pair may target the 1.3239 tough barrier ahead of the 1.3270 peak.
In brief, USDCAD continues to present a strong short-to-medium-term bearish bias below the descending line and the SMAs.