- USD/CAD finds strong support at uptrend line and 20-SMA
- Remains within upward sloping channel
- MACD and RSI tick higher
USD/CAD lost more than 2.5% on Monday’s session after it recorded a fresh 22-year high at 1.4792 and successfully recovered the bearish gap. The pair returned below the short-term trading range with strong resistance to the 23.6% Fibonacci retracement level of the up leg from 1.3440 to 1.4792 at 1.4465.
If the pair remains above the medium-term uptrend line and the 20-day simple moving average (SMA), immediate resistance could come from 1.4465 ahead of the 1.4590 barricade. Even higher, the peak in March 2020 at 1.4680 and the multi-year high of 1.4792 may halt upside actions. Slightly higher, the return line of the upward sloping channel may also act as strong resistance line at 1.4840.
On the flip side, a break of the ascending trend line could lead the market until the 50-day SMA at 1.4295 before resting near the lower boundary of the trading range, which coincides with the 38.2% Fibonacci at 1.4270. Below that, the price could raise the likelihood for steeper bearish actions heading to the 50.0% Fibonacci of 1.4110.
From a technical perspective, the MACD is still holding above its trigger and zero lines, while the RSI is pointing upwards above the neutral threshold of 50. Both currently confirm the recent upside move.
To conclude, USD/CAD has been in an upside tendency since the end of September but a break below the 1.4270 area may open the way for bearish actions in the near term.