USDCAD moves sideways in a tight range

USDCAD has been moving sideways over the last three weeks within a tight range with the upper boundary at the 1.3700 psychological mark and the 1.3510 support level.

In trend indicators the 20-and 50-day simple moving average (SMAs) posted a bullish crossover, suggesting more upside moves. However, the MACD oscillator is moving sideways above the zero level, while the RSI is pointing slightly down in the positive region, indicating a weak bias.

If the market extends its gains above the 1.3700 mark, then the next barrier to have in mind is the 1.3850 resistance and the 29-month high of 1.3980, registered on October 13. Any moves above this line could endorse the long-term bullish outlook sending the market to the 1.4170 barrier, taken from the high in May 2020.

On the other hand, a drop below the short-term SMAs could open the way towards the 1.3510 support before extending the losses towards the 1.3225-1.3310 support area. Below that, the 200-day SMA at 1.3100 may halt the bearish movements.

Summarizing, USDCAD is neutral in the short-term timeframe, but in the broader outlook it is still bullish. A move beneath the 200-day SMA may change the outlook to bearish. 

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).