USDCAD improves above the descending triangle

USDCAD advanced above the descending triangle, surpassing the 1.3520 resistance level; however, the RSI indicator is moving sideways above the neutral threshold of 50 and the MACD oscillator is moving slightly higher above its trigger and zero lines, but with weak momentum. The 20- and the 50-day simple moving averages (SMAs) suggest a potential bullish crossover in the next few sessions.

Should the pair manage to strengthen its positive momentum, the next resistance could come around the 1.3700 psychological mark. A break higher may challenge the 1.3800 handle ahead of the peak of 1.3975, achieved in October 2022.

On the flip side, if prices are unable to remain above the symmetrical triangle, the risk would shift back to the downside, with the 50-day SMA at 1.3465 and the 20-day SMA at 1.3420 coming again into focus. A drop below these lines would signal a resumption of the medium-term downtrend that’s been developing since October 2022. The next key support to watch lower down is the 200-day SMA at 1.3260.

Summarizing, USDCAD is showing some positive signs and only a drop back below the short-term SMAs may switch the outlook back to a strongly bearish one.

About the author

Melina Deltas

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities. Melina studied Pure Mathematics at Lancaster University and has a Master's Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).