USD/CAD Price Analysis: Recovery needs validation from 1.3730
- USD/CAD struggles to defend the bounce off two-week low inside short-term triangle.
- Convergence of 50-SMA, triangle’s top line challenge Loonie pair buyers.
- Bears have a bumpy road to travel before retaking control.
- Sustained trading beyond key SMA, bullish chart pattern and absence of momentum-negative oscillators favor buyers.
USD/CAD grinds near 1.3715-20 as it resists welcoming bulls during the initial hours of the Federal Reserve (Fed) day. In doing so, the Loonie pair struggles to extend the previous day’s recovery moves from the lowest levels in a fortnight inside a two-week-old descending triangle formation.
That said, the quote’s latest hesitance could be linked to the failure to cross the 1.3730 resistance confluence including the 50-SMA and upper line of the stated triangle.
However, the Loonie pair’s ability to provide successful trading above the key SMAs joins the bullish MACD signals and firmer RSI (14), not overbought, keeps the USD/CAD bulls hopeful of overcoming the 1.3730 hurdle.
In that case, the buyers could aim for the monthly high surrounding 1.3865, with the 1.3800 round figure acting as an intermediate halt, before portraying a run-up towards the previous yearly top of 1.3977 and then to the 1.4000 psychological magnet.
On the flip side, the USD/CAD bears need validation from the stated triangle’s lower line, close to 1.3650. Even so, the 200-SMA support near 1.3575 appears a crucial challenge for the sellers to tackle. It’s worth noting that the 100-SMA can offer immediate support near 1.3695.
Overall, USD/CAD is likely to remain firmer but the immediate pullback can’t be ruled out.
USD/CAD: Four-hour chart
Trend: Further 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.
