USDCAD is likely to decline further as 2023 begins

FX:USDCAD   U.S. Dollar / Canadian Dollar
USDCAD holds onto the late December downside break of the seven-week-old ascending support line, even if the 200-SMA challenges the bears. That said, the downbeat MACD and RSI conditions also favor the Loonie pair sellers as they attack the key SMA surrounding 1.3520. Additionally challenging the bears is the double bottoms marked around 1.3485-80 during the last week, a break of which could quickly drag prices towards the previous monthly low of around 1.3380. In a case where the quote remains bearish past 1.3380, November’s low of 1.3225 will gain the market’s attention.

On the contrary, recovery moves need to cross the previous support line from early November, close to 1.3645-50 by the press time, to convince buyers. Even so, the double tops marked the last month at around 1.3700 will be a crucial challenge for the USDCAD optimists. It's worth noting that the pair’s run-up beyond 1.3700 won’t hesitate to challenge the yearly high marked in October around 1.3980. However, November’s peak near 1.3810 could act as a buffer during the anticipated run-up.

Overall, USDCAD is likely to remain weak but the 200-SMA can challenge short-term sellers amid the holiday mood.


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