USDCAD has been confined within the 1.2859 – 1.2875 zone over the past three days, but its short-term outlook continues to look bright.
Particularly, the MACD remains positively charged above its signal and zero lines, while the rising RSI has yet to reach its 70 overbought mark, both suggesting that last week’s impressive rally off 1.2516 could gain more legs. On the other hand, the Stochastics have pivoted southwards, though the indicators remain above their 80 overbought level for now, keeping the bias on the bullish side for now.
If the 1.2875 nearby resistance gives way, the 1.3026 number, which overlaps the 200-weekly simple moving average (SMA) and the 38.2% Fibonacci retracement of the 2020 downtrend, may attract special attention before the spotlight turns to May’s peak of 1.3075. Should the bulls accelerate from here, the 50% Fibonacci of 1.3340 and the 1.3380 barricade from the second half of 2020, could be the next obstacle.
In case buying pressures fade immediately, the pair will again seek shelter around 1.2859. Slightly lower, the 1.2800 mark will be watched ahead of the 1.2700 psychological level, a break of which could bring the 200-day SMA and the 23.6% Fibonacci level of 1.2638 under examination.
Summarizing, USDCAD’s progress may further expand in the short term, likely bringing May’s ceiling into focus unless the bar at 1.2875 stands firm.