USD/CAD Bulls Regain Traction, Targeting 200-Day SMA Near 1.3800 - Forex | PriceONN
USD/CAD extends upside – breaks back above rising trendline. Momentum signals stay moderately supportive . USD/CAD is gaining for a fourth consecutive session, trading near 1.3785. The pair has broken back above its short-term uptrend line and retraced more than half of its recent pullback from multi-month highs to a seven-week low. The CAD remains […] The post USD/CAD Bulls Regain Traction, Targeting 200-Day SMA Near 1.3800 appeared first on ActionForex.

Canadian Dollar Faces Renewed Selling Pressure

The USD/CAD currency pair is demonstrating a notable resurgence, marking its fourth straight day of gains and pushing towards significant technical levels. Currently trading near the 1.3785 mark, the pair has successfully reasserted itself above a short-term ascending trendline. This upward movement signifies a partial retracement of its recent slide from multi-month peaks, which had previously driven it to a seven-week trough.

Several factors are contributing to the Canadian dollar's weakened position. A primary driver is the downward pressure on oil prices, a key commodity for Canada's economy. This is further compounded by evolving geopolitical expectations, including potential shifts toward peace between the US and Iran, which can temper demand for risk-associated assets and commodities.

Technical Indicators Signal Cautious Optimism

Momentum indicators are offering a moderately supportive, though not entirely unambiguous, signal for the near-term bullish outlook on USD/CAD. The Moving Average Convergence Divergence (MACD) indicator is showing an upward trajectory within positive territory, suggesting underlying buying interest.

However, the Relative Strength Index (RSI) presents a more nuanced picture. While trending higher, it is exhibiting signs of moderation. This divergence implies that while buyers are currently in control, the force behind the advance has not yet reached a fully convincing crescendo. Traders are watching closely to see if this momentum can be sustained.

Key Resistance and Support Levels to Watch

The immediate hurdle for the bulls is the 200-day Simple Moving Average (SMA), situated in close proximity to the 1.3800 psychological barrier. This area also coincides with the 61.8% Fibonacci retracement level of the decline observed between March 31 and May 1. A decisive breach of this critical resistance zone could pave the way for further appreciation, potentially targeting the 78.6% Fibonacci retracement at 1.3876, and ultimately the three-month summit near 1.3965.

Conversely, the downside is being monitored for potential support. Initial floors appear at the 50% Fibonacci level, approximately 1.3757. Below this, the 50-day SMA offers a closely situated layer of defense, hovering around 1.3740. A more substantial test of support could occur near the 38.2% Fibonacci retracement around the 1.3700 handle. A move below the 1.3647 level would be a significant development, potentially reversing the current bullish bias as the price would then trade below all major moving averages.

Reading Between the Lines

For the bullish sentiment surrounding USD/CAD to persist, maintaining a position above the recently reclaimed ascending trendline is paramount. However, the true test lies in its ability to decisively conquer the 200-day SMA near 1.3800. Such a breakout would be critical for confirming a stronger upside extension and could signal a more sustained trend change.

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