USDCAD had been trending lower after peaking at the 2023 high of 1.3860 in mid-March. However, the pair managed to halt its decline and has been gaining significant ground in the past few daily sessions, jumping above the 200-day simple moving average (SMA).
The momentum indicators currently suggest that bullish forces are intensifying. Specifically, the RSI crossed above its 50-neutral mark, while the stochastic oscillator is ascending in the overbought zone.
Should the rebound resume, initial resistance could be met at the 1.3552 barrier. Violating that region, the price could challenge the March support of 1.3630, which could serve as resistance in the future. Further advances could then cease at the 1.3700 psychological mark that held strong in December 2022.
To the downside, bearish actions could send the price to test the April support of 1.3405, which lies close to the 200-day SMA. If that floor collapses, the April low of 1.3300 might curb the pair’s retreat. Even lower, the 2023 bottom of 1.3262 could provide downside protection.
In brief, USDCAD seems to have temporarily paused its selloff as technical indicators have tilted to the bullish side. Hence, for the rebound to strengthen the pair needs to initially conquer the 50-day SMA, currently around the 1.3580 handle.
