From a weekly technical point of view, as price entered previous consolidation zone of 1.237 and Fibo 100% @ 1.28, a differ of bearish and bullish biases loom over the Loonie. MACD formed a third consecutive identical bar, indicating a stagnation of weekly downward pressure. RSI has bounced from 50 level and now rests on downward trend line and price has formed a weekly doji candlestick, which is a bearish reversal candlestick formation.
On a daily time-frame, there is no identical trend forming as the pair is moving sideways. MACD has gone above its zero line and indicates bullish USD pressure. RSI declines from 70 level towards 50 zone and 50 SMA stays flat, giving ground for both bulls and bears.
Two major scenarios could be expected based on USDCAD weekly technical outlook:
First – Remaining between the previous consolidation boundaries of 1.237 and Fibo 100% @ 1.28, having price mostly driven by fundamentals.
Second – Mostly by a shear pressure from the weekly doji, breaking the 1.237 level and aiming towards Fibo 50% @ 1.20.
In any case, the price will most likely start the week heading to previous week’s Pivot line at 1.2454, bouncing from it and with the help of the weekly doji’s provided bearish pressure, moving towards lower boundary of 1.237, nevertheless, as both 50 and 200 MA look up, they will provide resistance for the downward move. If price will be rejected by the level, the consolidation will continue, firstly aiming for 1.237 level and then for Fibo 88.6% @ 1.262. However, if the level will be broken, bears will move to May’s Pivot line at 1.23 and from there to Fibo zone of 61.8% @ 1.22.
At any point, after bouncing, the two scenarios can interchange. Furthermore, an eye should be kept on oil prices. For fundamental news that can affect the market check – 08/06 week fundamental outlook.