HomeContributorsTechnical AnalysisUSDCAD Marks Best Week For 2021, Rally Slows Near Familiar Resistance

USDCAD Marks Best Week For 2021, Rally Slows Near Familiar Resistance

USDCAD had its most constructive week since March 2020, rallying by 1.7% to a seven-week high of 1.2382.

The bull run has snapped the one-month-old trading range and sent the price above its 20- and 50-day simple moving averages (SMAs), but a familiar heavy obstacle is currently threatening to put breaks on the rally.

Particularly, the long-term resistance trendline and the surface of the Ichimoku cloud, which have been limiting upside movements over the past eight months, could captivate the pair below the 1.2400 level and within the broad downtrend once again, deterring any progress towards the 1.2500 barrier. Higher, the area around 1.2650 and the 200-day SMA at 1.2700 could set a tougher battle in case of steeper increases.

In momentum indicators, the MACD has jumped into the positive area for the first time since February and is at the highest since September 2020. The RSI and the Stochastics have also accelerated but they have yet to peak in the overbought area, all reflecting a cautiously bullish bias.

Failure to overcome the 1.2400 number could press the price towards the cloud’s bottom line and the former 1.2265 support region, while a close below the protective red Tenkan-sen line at 1.2222 could confirm another negative extension to 1.2160. If sellers persist, the door will open for the 1.2060 handle.

Summarizing, although the short-term bias for USDCAD remains tilted to the upside, the recent advance requires careful monitoring as the price is currently testing a crucial resistance territory. A sustainable move above 1.2400 could amplify buying interest.

XM.com
XM.comhttp://clicks.pipaffiliates.com/c?c=231129&l=en&p=0
XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading