- USD/CAD trades in a relatively tight range on Thursday.
- Bears challenge the key support area near 1.2300.
- Oversold MACD warrants caution for aggressive directional bets.
The USD/CAD pair seems to gather some momentum after it witnessed some selling pressure on Wednesday, in the European session on April 29. The pair is making efforts to reclaim the 1.2330 mark, which lies in the vicinity of the intraday high.
At the time of writing, USD/CAD is trading at 1.2308, down 0.03% on the day.
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On the daily chart, the pair has been nursing its losses after it broke the 1.2300 mark and refreshed the intraday low near 1.2285. The pair managed to rebound from the immediate lows while accumulating a 25-pip move. The downward trend line extending from the January 28 high of 1.2881 acted as a strong resistance zone for the pair and is also coinciding with the 50 DMA at the recent 1.2550 region that marked a sharp decline in the price
If the price can not sustain above the 1.2300 area, then it would be on its way to witness January 2018 lows near the 1.2280 region. Furthermore, in the absence of any immediate support, the next level for bears would be yearly September 2017 lows in the vicinity of 1.2080.
On the flip side, the Moving Average Convergence Divergence (MACD) indicator is hovering in oversold territory, which suggests that any sudden uptick in the price can not be ruled out. If that happens, then a quick rebound toward Wednesday’s high of 1.2418 is visible, which will, in turn, reverse the prevailing trend and make a speedy recovery back to the 1.2450 and 1.2500 horizontal resistance zones.
