The USDCAD probes above daily cloud top 1.2537 (also Fibo 61.8% of 1.2597/1.2432 pullback) on Tuesday, in extension of Monday’s rally which showed strong rejection at cloud top.
The US dollar received support from President Trump’s comments about favoring more hawkish person to replace Fed Chief Yellen, while concerns about NAFTA talks success weigh on Loonie.
Setup of daily studies is bullish and supports further advance, but close above daily cloud is required to confirm and neutralize downside risk if near-term action stays capped by cloud top.
Bullish scenario sees final push towards key near-term barrier at 1.2597 (06 Oct high), break of which would signal continuation of larger uptrend from 1.2061 (08 Sep low).
Bulls could be delayed on repeated rejection at cloud top, while return and close below broken 10SMA (1.2502) would generate bearish signal.
Res: 1.2558, 1.2597, 1.2636, 1.2661
Sup: 1.2515, 1.2502, 1.2465, 1.2458