Technical Analysis – Is there stronger bullish trend for USDCAD?
USDCAD switches back to gains, surpasses SMAs
Technical signals cannot warrant a bullish channel breakout
USDCAD successfully recovered from a flash drop to 1.3454 and closed Thursday’s session above the 50- and 200-day SMAs, maintaining its position within the short-term bullish channel. Consequently, the bulls piled in on Friday to drive the pair above the 20-day SMA and the 50% Fibonacci retracement of the November-December downtrend, which has been a key resistance zone since the start of the year.
The recent bullish accomplishments have raised expectations for further progress towards the upper boundary of the channel at 1.3655. However, the current neutral trend in the RSI and MACD does not inspire confidence. Prior to a channel breakout, the bulls will have to overcome the 61.8% Fibonacci mark of 1.3622. Should they exit the channel on the upside, resistance could initially develop somewhere within the 1.3700-1.3745 region, and then around 1.3800.
Conversely, if the pair sinks below the important 1.3445-1.3470 support area, it could seek shelter within the 1.3345-1.3380 territory, where the 23.6% Fibonacci number is placed. Even lower, the bears might push towards the ascending trendline, which connects the 2021 and 2022 lows at 1.3300.
Overall, the recent rise in USDCAD doesn’t provide enough technical evidence for an immediate extension towards the upper boundary of the channel.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
