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Technical Analysis – USD/CAD rebounds on the 20-day SMA

USD/CAD 10May19 | EconAlerts

USD/CAD rebounds on the 20-day SMA but indicators look weak.

USD/CAD rebounded on the 20-day simple moving average (SMA) several times in the preceding sessions, but it still remains below the four-month high of 1.3520. The risk is currently viewed as bullish-to-neutral as on the one hand, the RSI seems to be changing direction southward to meet the 50 neutral level, but the red Tenkan-sen is on a sideways move above the blue Kijun-Sen and the MACD is trying to strengthen above its trigger line.

The bulls could set immediate target around the four-month high of 1.3520, while a break higher would open the way towards the 19-month high of 1.3663, reached on December 2018.

Otherwise, the 20-day SMA at 1.3430 could be watched in case of a negative correction. Should there be additional losses, the next support could be around the 1.3380 restrictive level, which stands near the 40-day SMA. A failure to hold above that number could then lead the price towards the 23.6% Fibonacci retracement level of the up leg from 1.2250 to 1.3663 around 1.3230, breaking the long-term ascending trend line.

In the long-term picture, USD/CAD is strongly positive as long as the pair trades above the 16-month ascending trend line. Traders should wait for a daily close above 1.3520 for more bullish actions.


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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


Source: XM

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