- USD/CAD is on track to post the first monthly gain since August.
- The 50-month moving average has restricted downside since June and is the level to beat for the bears.
USD/CAD is currently trading at 1.3285, representing a 0.92% gain on the monthly opening price of 1.3164.
The pair is on track to post a monthly gain for the first time since August. Back then, the pair had risen by 0.89% only to drop 0.51% and 0.58% in September and October, respectively.
Notably, the sellers have repeatedly failed to keep the pair below the 50-month moving average since June. In fact, similar price action has been observed on multiple occasions over the last two years.
For instance, the pair ended the month below the key average in January 2018 only to rise back sharply in the following month. However, back then, the MA was trending north, indicating a bullish setup.
Currently, the MA is pretty much flatlined, a sign of weakening of bullish momentum. As a result, a big drop could be seen if the MA support at 1.3125 is breached next month.
On the higher side, 1.3565 (May high) is the level to beat for the bulls.
Monthly chart
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Trend: Bearish below 50-month MA
Technical levels
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