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USDCAD in an aggressive decline from its 5-month high of 1.3693
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Dives beneath the 200-day SMA, but the 50-day SMA holds its ground for now
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Momentum indicators suggest more pain in the short term
USDCAD has been undergoing a strong downside correction from its five-month peak of 1.3693 recorded on September 7. In the last couple of sessions, the pair has been attempting to pierce through both the 200- and 50-day simple moving averages (SMAs), with the latter proving rather resilient.
As the momentum indicators are heavily tilted to the bearish side, the price could initially descend towards the recent support of 1.3377. A violation of that territory could open the door for the April bottom of 1.3300. Further declines could then cease at the February low of 1.3262.
On the flipside, bullish actions could propel the price higher towards the recent resistance of 1.3522. Breaking through that wall, the pair may test the August resistance of 1.3638. Should that barricade also fail, the spotlight could turn to the April high of 1.3666 ahead of the five-month peak of 1.3693.
In brief, USDCAD has been in a steady retreat, which appears to be encountering strong support at the congested region that includes both the 50- and 200-day SMAs as well as the ascending trendline that connects a series of higher lows since October 2022. A break below that fortified zone could trigger a vast selloff.
