Technical Analysis – USDCAD stuck between converging SMAs
USDCAD extends its rebound to a fresh 1-month high
But does not manage to close above the 50-day SMA
Momentum indicators turn positive
USDCAD had been staging a solid recovery from its December low of 1.3176, but the 50-day simple moving average (SMA) prevented further gains. Despite the rejection, the 200-day SMA has been acting as a strong floor, thus the price is currently hovering between the converging SMAs.
Considering that the MACD has climbed to its positive zone for the first time since late November, the pair could jump above the 50-day SMA and revisit its one-month peak of 1.3540. Conquering that hurdle, the bulls could attack 1.3618, a region that held strong multiple times in December. Further advances may then cease at the April-May resistance of 1.3653.
Alternatively, should the price slide below its 200-day SMA, the September bottom of 1.3377 could be the first barricade for the price to claim. A violation of that territory could open the door for the April bottom of 1.3300. Failing to halt there, the pair could extend its retreat towards the December low of 1.3176..
In brief, USDCAD has been stuck between the converging 50- and 200-day SMAs, while the wide Bollinger bands might suggest heightened volatility moving forward. Therefore, a decisive break above or below the range defined by the SMAs could lead to a significant move in the same direction.
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