USDCAD has reversed its recent decline below the cloud and gained some upside momentum to close inside the cloud yesterday. Prices have risen above the tenkan-sen line which is now providing support at 1.3158. Technical signals are looking a bit more bullish – RSI has moved above 50 and MACD is attempting to rise above zero. But they are both horizontal so this suggests that the market will remain neutral in the near term. A decisive break above the cloud and above the October 28 high of 1.3278 is needed for a resumption of the uptrend that started from 1.2831 (October 15).
Looking at the bigger picture, the market has corrected 23.6% of the uptrend from 1.1919 (May 2015) to 1.3456 (Sept 2015) 11-year high. If the market fails to remain above this Fibonacci level, which is around the key 1.3100 level and breaks below it, then there is risk of reversing the trend.
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