USDCAD Builds Base Above 6-Year Low

USDCAD is rising after the rebound off the six-year low of 1.2012, however, the bullish move is not strong enough yet to surpass the 1.2200 handles.

The momentum indicators are showing some signals for a potential upside correction. The MACD jumped above its trigger line, remaining beneath its zero levels, while the RSI is sloping north below the neutral threshold of 50. In trend indicators, the 20- and 40-day simple moving averages (SMAs) are still moving lower and the Ichimoku lines are pointing down.

A closing candle above the 20-day SMA could open the door for the 1.2200 critical level ahead of the 40-day SMA currently at 1.2245. Above these lines, the 1.2365 resistance and the 1.2645 barriers could attract investors’ attention.

On the other hand, the price could enter new lows if there is a break below 1.2012. The next target is coming from the 1.1920 support that was reached in May 2015. More downside pressures could see the 1.1720 low from July 2009.

In conclusion, USDCAD is moving sideways over the last month, despite the recent bullish move. In the long term, the pair has been in a strong downside structure since March 20.

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