USD/CAD Price Analysis: Bounces off 50-SMA towards 1.3260 hurdle
- USD/CAD reverses from 50-SMA to renew intraday high.
- Firmer RSI backs recovery from short-term key SMA, suggesting further upside towards three-week-old resistance line.
- 200-SMA, mid-June peak holds the key to Loonie pair buyer’s conviction.
- Downside break of 50-SMA isn’t open invitation for the bears targeting yearly low.
USD/CAD bulls flex muscles around 1.3240 as it refreshes intraday high while consolidating the previous day’s losses amid the initial hour of Wednesday’s European session. In doing so, the Loonie pair rebounds from the 50-SMA.
That said, the quote’s recovery gains support from the upbeat RSI (14) line, not overbought, which in turn suggests the further advances of the USD/CAD price. However, a downward-sloping resistance line from the mid-June, near 1.3260 at the latest, appears immediate resistance for the pair buyers to watch.
Following that, a three-week-old horizontal resistance area around 1.3275-80 and the 200-SMA surrounding 1.3360 can challenge the USD/CAD bulls before giving them control.
Even so, the Loonie pair buyers need to cross the mid-June swing high of around 1.3385 for conviction.
On the contrary, a downside break of the 50-SMA, close to 1.3215 by the press time, can quickly fetch the USD/CAD price toward the lows marked during June 16-19 near 1.3180.
In a case where the Loonie pair breaks the 1.3180 support, the yearly low of around 1.3115 and the 1.3000 psychological magnet will be in the spotlight.
To sum up, USD/CAD is likely to witness further recovery but the road toward the north is long and bumpy.
USD/CAD: Four-hour chart
Trend: Limited upside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
