USD/CAD Price Analysis: Gathers strength for a breakout above 1.3850
|
- Ascending 20-and 50EMAs add to the upside filters.
- Negative market sentiment supports the greenback’s appeal.
- The RSI (14) is aiming to enter into the bullish range of 60.00-80.00.
The USD/CAD pair is oscillating around 1.3800 following the sideways performance in the US dollar index (DXY) after a firmer rebound from 112.50. The risk sentiment is dismal amid weaker S&P500 futures and is expected to support the safe-haven appeal further. Also, the 10-year US Treasury yields are aiming to recapture 4%.
On a four-hour scale, the major is auctioning in an inventory adjustment process, which indicates a tad longer consolidation period. It is critical to state that the adjustment process is a mark-up accumulation or distribution by institutional investors. Prior momentum has remained extremely bullish, therefore, odds are favoring a mark-up accumulation.
The 20-and 50-period Exponential Moving Averages (EMAs) at 1.3758 and 1.3705 respectively are aiming higher, which adds to the upside filters.
Also, the Relative Strength Index (RSI) (14) is aiming to shift into the bullish range of 60.00-80.00, which will trigger an upside momentum.
Should the asset break above Tuesday’s high at 1.3855, the greenback bulls will expose the asset to hit a fresh two-year high at 1.4000. A breach of the latter will drive the major towards May 2020 high at 1.4173.
On the contrary, a decisive break below the round-level support placed at 1.3600 will drag the asset towards the psychological support at 1.3500, followed by September 19 high at 1.3344.
USD/CAD four-hour chart
-638011343304309506.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.