USD/CAD loses momentum below 18-month high; retains bullish outlook
|USDCAD is losing momentum after the aggressive upside run towards the 18-month high of 1.3443 on December 6. The price is developing well above its moving averages which are positively sloped, a sign that the uptrend could continue and remains in an ascending movement in the short- and long-term timeframes. Momentum indicators are also in bullish territory, with the MACD crossing above its red signal line and the RSI fluctuating well above its 50 mark.
An extension to the upside would likely retest the previous peak of 1.3443. Higher than that, positive momentum could speed up towards the 1.3540 resistance level, registered on June 2017, whilst a penetration of this significant barrier could send prices near the 1.3800 handle, the top of April 2017.
A downside reversal could rest around the 20-day simple moving average (SMA) around 1.3290, before heading towards the short-term rising trend line near 1.3250. Below that, the pair could break this line and re-challenge the 1.3160 support level, increasing the chances for a bearish correction mode. Also, the 23.6% Fibonacci retracement level of the upleg from 1.2060 to 1.3443, around 1.3117 could be a strong level for investors to look for.
Summarizing, USDCAD has been trading in an upward tendency since September 2017, creating higher highs and higher lows.
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