USDCAD is sustaining its weekly neutral tone below 1.2650

Launch Chart
farhan fazal
USDCAD
·
Apr 16 2022
Stop Loss -0.52%
Holding time 1d7hr
1.25750
Entry price
1.25090
Stop loss price
snapshot
USDCAD has been fighting its 50- and 200-day simple moving averages (SMAs) within the 1.2625 – 1.2650 zone the entire week without success, increasing speculation that buyers are losing their impetus. The aforementioned restrictive area also encapsulates the support-turned-resistance trendline from June 2021 and the 50% Fibonacci retracement of the 1.2287 – 1.2962 upleg, making a pullback more likely.
Yet, currently, technical signals are rather neutral. The RSI is trying to inch back above its 50 neutral mark, whereas the Stochastics have changed direction to the downside after peaking above their 80 overbought level. Meanwhile, the MACD keeps strengthening its positive momentum above its red signal line. The technical picture in the four-hour chart is more discouraging.
A potential downside reversal could immediately halt somewhere between the 20-day SMA and the 61.8% Fibonacci of 1.2500. If the bears achieve a close below 1.2470, the price could tumble directly towards the 1.2400 round-level, while deeper, the spotlight will shift to October’s low of 1.2287.
If the price manages to run successfully above the 50-day SMA at 1.2650, the bulls may initially get congested around the 38.2% Fibonacci of 1.2700. The 23.6% Fibonacci of 1.2830 could come into view next, while higher, the tentative descending trendline currently at 1.2855 and the 1.2880 barrier may attempt to block any moves towards the 1.2962 top.
Summarizing, USDCAD is sustaining its weekly neutral tone below the key bar of 1.2650. The longer the price is capped around that resistance, the bigger the risk for a bearish correction.