USDCAD continued to retreat from the January high of 1.4689 to hit a 3-month low of 1.3385 on Tuesday. Prices bounced back above 1.34 today but the bias remains to the downside.
The momentum indicators are all pointing to a bearish bias for the near term. RSI is slightly above oversold territory, while the MACD maintains a descending trend. Further losses would take prices towards the 200-day moving average, which is the only remaining bullish indicator. The 200-DMA also corresponds with a previous support and resistance level around 1.3260. If broken, this would increase the bearish bias.
A recovery above the 1.37 handle is needed to weaken the downside bias. This would also help the pair gain momentum for a push into the Ichimoku cloud and above the 50-day moving average, which would signal the end of the current correction.
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