USDCAD looks for recovery after peaking at 1.3860

USDCAD has been consolidating losses since the day it surged to 1.3860 and holds near the 20-day simple moving average (SMA).

The momentum indicators, though, are currently suggesting that the sell-off may have found a bottom and the pair may be pushing for some recovery. The RSI and the Stochastics are pointing up, with the former standing in the positive region and the second one posting a bullish crossover between its %K and %D lines.

A closing price above 1.3860 could boost buying interest and confirm additional gains towards the 1.3975 resistance, taken from the peak in October 2022.

In the event of a pullback below 1.3640, the bears may push harder to clear the 50-day SMA, which stands around the 1.3520 support level and head for the 200-day SMA at 1.3360. Any movements beneath this line could endorse the negative structure.

In brief, USDCAD seems to be searching for a recovery, though only a closing price above the 1.3860 territory would convince that the worst has passed, at least in the medium-term.

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).