-
USDCAD returns above 20-day EMA and familiar constraining line.
-
Technical signals cannot warrant a meaningful rally.
-
September’s US nonfarm payrolls due at 12:30 GMT.
USDCAD continued its upward movement from a seven-month low of 1.3418, surpassing its 20-day exponential moving average (EMA) and the constraining ascending line from the 2021 low.
The range of 1.3580-1.3620, which encapsulates the 50- and 200-day EMAs as well as the 38.2% Fibonacci retracement of the latest downleg is the next target on the upside. A successful penetration higher could see an acceleration towards the 50% Fibonacci of 1.3680. Further up, the bulls may head for the 61.8% Fibonacci of 1.3740.
However, caution may be necessary based on the technical picture. There is no improvement in trend signals as the EMAs continue to point downwards. Moreover, the RSI has yet to step clearly above its 50 neutral mark and the stochastic oscillator is already very close to its 80 overbought level.
Nevertheless, sellers may stay on the sidelines until the price slips below the 20-day EMA at 1.3530. If this situation occurs, there could be immediate support around 1.3470, and then the bears may push for a close below 1.3400 with scope to reach the 1.3350 barrier from January 2024.
Briefly, there may be constraints on how much USDCAD can rise in the near future. For a decisive rally the pair may need to pierce through 1.3620, whilst a drop below 13530 might be enough to resume selling interest.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.