Sunday, September 22, 2019
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Technical Analysis – USD/CAD bias bullish-to-neutral

USD/CAD bulls get rejected from 200-day SMA; bias bullish-to-neutral.

USD/CAD got rejected by the 200-day simple moving average (SMA) and the 1.3300 level after an attempt to cross above the area and the Ichimoku cloud.

The pair immediately gave up most of its gains made this week on Thursday, with the technical indicators suggesting a bullish-to-neutral bias for the short-term. The RSI is slowing towards its 50 neutral level, the MACD is losing steam above its red signal line, while the red Tenkan-Sen is flattening above the blue Kijun-sen.

Nearby support could be found around the 1.3200 level and the 50-day SMA, while a more aggressive downfall could hit tougher support near 1.3143.  If selling pressure persists, the spotlight will shift to the 10-month low of 1.3015, while slightly lower a former barrier around 1.2970 should be in focus as well.

On the upside, the bulls would retry to break the 1.3300 level and exit the Ichimoku cloud, whilst a close above 1.3340 may open the door for the 1.3400 number. Further up, the 1.3450 congested level could also limit upside movements.

In the three-month window (medium-term), USD/CAD continues to hold in a downward move and only a climb above 1.3400 would officially resume a neutral profile. However, the increasing distance between the 50- and the 200-day SMAs, which produced a bearish cross in mid-July, reduces the odds for an outlook reversal.

Summarising, USD/CAD is expected to record a bullish-to-neutral session in the short-term, whilst the medium-term outlook may stay negative.


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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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