It is currently challenging the long-term uptrend line and the 200-day simple moving average (SMA) near the psychological 1.2600 mark. Prices are showing some signs that this will be a diagonal penetration, indicating the beginning of a neutral outlook.
Technical indicators show that the MACD oscillator dipped below the zero line, strengthening its momentum below the trigger line, while the RSI fell below the neutral threshold of 50. The 20-day and 40-day moving averages are poised for a bearish crossover, confirming the recent move.
If the pair turns to the downside, the bears could challenge the previous bottom at 1.2580. A break below is likely to continue until 1.2450, then from the October 2021 low to 1.2285 support.
Alternatively, a bounce off the uptrend line could push prices towards the 20- and 40-day SMA at 1.2730. Above the latter, resistance at 1.2875 could become another focus ahead of the 14-month high of 1.2960, which has recently rejected market action.
All in all, USDCAD maintains a bearish phase in the short-term and could also turn the long-term outlook negative if it manages to break below the uptrend line.
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