USDCAD has declined considerably after touching the 1.3700 round number, losing more than 3%. During Thursday’s trading session, it posted an almost three-month low of 1.3260, while it is currently not far above that nadir.
The negatively aligned Tenkan- and Kijun-sen lines serve as a testament to the negative short-term momentum that is in place. The Chikou Span, though, is signaling a potentially oversold market; a near-term reversal should thus not be ruled out. The RSI is heading north in the negative region, while the stochastic oscillator posted a bullish crossover within its %K and %D lines in the oversold territory.
Immediate support to further declines may be taking place around the 1.3225 figure, which overlaps with the 200-day simple moving average (SMA). Below that, the 1.2950 barrier could provide additional support in case of steeper losses.
A move to the upside may meet resistance around the 20-day SMA at 1.3375 before challenging the 50-day SMA at 1.3490 and the 1.3515 barrier. The region around the 1.3700 handle could act as an additional level in case of stronger bullish movement.
The short-term picture is looking predominantly bearish at the moment, with price action taking place below the 20- and 50-day SMAs, as well as below the Ichimoku cloud. Any moves beneath the 200-day SMA could switch the longer-term outlook to negative as well.
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