- USD/CAD grapples to extend its gains on the back of subdued Crude oil prices.
- A firm breakthrough above 1.3600 could lead the pair to reach a 21-day EMA at 1.3620.
- 14-day RSI lies below the 50 mark; the 1.3550 level could act as key support.
USD/CAD struggles to extend its gains for the second successive day while US Dollar (USD) stays in the positive territory. The downbeat Crude oil prices reinforce the downward pressure on the Canadian Dollar (CAD). The USD/CAD pair trades higher around 1.3590 during the European session on Wednesday.
The USD/CAD pair finds the psychological level at 1.3600 as a key barrier. A firm break above the latter could inspire the bulls of the USD/CAD pair to explore the 21-day Exponential Moving Average (EMA) at 1.3620 followed by the 38.2% Fibonacci retracement level at 1.3840 before the major resistance at 1.3650 level.
The technical indicator Moving Average Convergence Divergence (MACD) for the USD/CAD pair signals a potential bullish trend reversal. MACD line lies below the centerline and crosses above the signal line. The crossover above the signal line suggests that the shorter-term moving average is gaining strength relative to the longer-term moving average, indicating a shift towards positive momentum in the pair.
However, the analysis suggests a dovish sentiment for the USD/CAD pair, with the 14-day Relative Strength Index (RSI) below 50. This implies a weakness in the pair, and it could lose ground. The mentioned support levels, including the major level around 1.3550 and the psychological support at 1.3500, are crucial markers to watch.
If the USD/CAD pair breaks below the latter, it might encounter further bearish pressure, potentially navigating toward the region around the previous week's low at 1.3480.
USD/CAD: Daily Chart
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