USD/CAD struggles below 50.0% Fibonacci; bearish correction mode in progress.
USD/CAD completed a bearish correction following the pullback from the 9-month high of 1.3130, reached on March 9. As a side note, the pair has been consolidating below the 1.2950 level until the 1.2800 handle, which overlaps with the 40-day simple moving average (SMA) over the last six trading days.
The price is stuck below the 50.0% Fibonacci retracement level of 1.2930 of the down-leg from 1.3800 to 1.2060, which is acting as a major resistance barrier and holds near the 20-day SMA.
Having a look at the momentum indicators in the daily timeframe, the MACD oscillator is falling below its red trigger line but stands above the zero line. Also, the RSI indicator is flattening near the threshold of 50, confirming the narrow range on price.
In case of further negative pressures, USD/CAD could challenge the lower band of the sideways channel at 1.2800. A successful close below this level could push the price towards the 38.2% Fibonacci mark of 1.2720. A drop below the aforementioned obstacle could open the door for the 1.2460 support, slightly below the 23.6% Fibonacci.
An alternative scenario is a continuation of the main upward movement, which has been standing since February 2. A jump above 1.2940 would shift the focus to the upside again and re-challenge the 1.3120 strong resistance barrier.
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