Risk of profit-taking increases as a familiar resistance area comes into sight
Fed and BoC governors scheduled to speak at 17:15 GMT
USDCAD sped up to unlock a new five-month high of 1.3820 on Tuesday despite the release of stronger-than-expected Canadian CPI data.
Having enjoyed their best weekly session so far this year, the bulls are dreaming of more gains after exiting the four-month-old bullish channel on the upside. Some caution, however, is required as the stochastic oscillator and the RSI are already located in the overbought region, suggesting the bears might be around the corner. But since the indicators haven’t peaked yet, there might be some room for improvement.
A clear close above 1.3800 could bring the critical 1.3860-1.3898 resistance territory under examination. Should the price successfully overcome that border, the next destination could be the 2022 top of 1.3976.
If the pair closes the day below 1.3800, and more importantly below the nearby support of 1.3772, it may seek shelter somewhere between 1.3722 and the upper band of the broken bullish channel at 1.3690. Failure to rotate there could activate strong selling towards the 20-day simple moving average (SMA), which is currently located inside the resistance territory of 1.3600-1.3615.
In brief, USDCAD could stay on the bullish path in the short-term, though room for improvement could narrow as the price approaches a long-term caution area.
USDCAD rises rapidly; reverses November-December downtrend
Risk of profit-taking increases as a familiar resistance area comes into sight
Fed and BoC governors scheduled to speak at 17:15 GMT
USDCAD sped up to unlock a new five-month high of 1.3820 on Tuesday despite the release of stronger-than-expected Canadian CPI data.
Having enjoyed their best weekly session so far this year, the bulls are dreaming of more gains after exiting the four-month-old bullish channel on the upside. Some caution, however, is required as the stochastic oscillator and the RSI are already located in the overbought region, suggesting the bears might be around the corner. But since the indicators haven’t peaked yet, there might be some room for improvement.
A clear close above 1.3800 could bring the critical 1.3860-1.3898 resistance territory under examination. Should the price successfully overcome that border, the next destination could be the 2022 top of 1.3976.
If the pair closes the day below 1.3800, and more importantly below the nearby support of 1.3772, it may seek shelter somewhere between 1.3722 and the upper band of the broken bullish channel at 1.3690. Failure to rotate there could activate strong selling towards the 20-day simple moving average (SMA), which is currently located inside the resistance territory of 1.3600-1.3615.
In brief, USDCAD could stay on the bullish path in the short-term, though room for improvement could narrow as the price approaches a long-term caution area.
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