USDCAD plummets to 8½-month low; negative bias remains

USDCAD is plunging today towards a fresh eight-and-a-half month low near 1.3030, following the pullback on the 1.3145 resistance level, which overlaps with the 20-day SMA.

Technically, the RSI indicator is declining in negative territory, approaching the oversold zone, while the stochastic oscillator posted a bearish crossover within the %K and %D lines in the middle of the 20 and 80 level, strengthening its bearish view on price.

Should prices tumble below Friday’s trough, support could be found around the 50.0% Fibonacci retracement level of the upleg from 1.2250 to 1.3664 near 1.2955. If there is a leg below that level, the market could meet the 1.2910 support, taken from the low on October 2018, before the focus shifts to the 61.8% Fibonacci of 1.2790.

However, if the market manages to pick up speed on the upside the 38.2% Fibo of 1.3120 could offer a nearby obstacle ahead of the 20-SMA currently at 1.3145. A significant close above the latter would push the price until the 1.3240 barrier, identified by the inside swing bottom on June 10.

Concluding, in the near-term, the bias remains negative since the price holds well below the moving averages and posts lower lows and lower highs. However, in the bigger view, USDCAD is still developing in an ascending movement. If there is a drop beneath the 61.8% Fibonacci, this would shift the outlook to bearish.