USDCAD is working to break up and out of a downtrend channel whose hold on the pair has endured last full year. The orderly simple moving averages (SMAs) still form primarily a bearish picture, making it even more difficult for buyers to gain a clear superiority.
The bulls are currently lacking the necessary upward drive to pierce over the upper band of the canal and cross the near 1.2486 fresh high, something is also reflected in the Ichimoku lines. As things stand, the short-term oscillators transmit conflicting signals in a one-way momentum. The MACD holds above its red trigger line in the positive region, while the gradually rising RSI remains targeted at the 70 level. That said, the stochastic% K line is stalling in over-purchased territory, indicating the absence of positive momentum needed to conquer the upper limit of the channel.
At this point, buyers need to gather significant positive forces to bypass the immediate ceiling of the channel and the neighboring high of 1.2486 in order for a momentum momentum to gain some speed. Successfully doing so could push the pair to challenge the resistance barrier at 1.2653, where the 200-day SMA also currently resides. Winning the 200-day SMA could encourage buyers with confidence to navigate to the resistance section 1.2880-1.2955.
If the channel remains victorious to halt progress, an early support zone could develop from the 100-day SMA at 1.2373 to the blue Kijun-sen-line at 1.2243. If the withdrawal from the ceiling of the channel continues lower, the next in line is an adjacent support band of the 50-day SMA at 1.2200 to the 1.2127 low. Becoming increasingly heavier, the pair may target the 1.2060 level, being the trough of September 2017, and the 6-year lows of 1.2012 and 1.2006 respectively.
In summary, USDCAD’s strong efforts could find help from the set of support obstacles below and especially if the dollar bill receives a boost from a stronger report on NFP wages, later in the day. However, if the data is disappointing and bearish pressures hold, the downtrend channel could soon regain its dominance over the pair.