The USD/CAD currency pair is maintaining its position within an ascending channel on the daily chart, signaling a resurgence of bullish sentiment as indicated by the 14-day Relative Strength Index (RSI) resting comfortably above the pivotal 50 mark. In the European session on Tuesday, the pair saw a modest uptick, nearing the 1.3700 level.
Adding to the positive outlook, the Moving Average Convergence Divergence (MACD) line remains above the centerline, indicating bullish momentum, although it trails below the signal line. Traders are likely to monitor the MACD for further confirmation of the prevailing trend, considering its status as a lagging indicator.
Looking ahead, the USD/CAD pair could face resistance around the psychological barrier of 1.3800. A successful breach above this level may set the stage for a retest of the five-month high at 1.3846, followed by the upper boundary of the ascending channel and the psychological threshold of 1.3900.
Conversely, downside movement could see the pair testing the lower boundary of the channel near the 1.3630 mark. A breakdown below this level might exert downward pressure, directing focus towards the region surrounding the psychological support at 1.3600 and the 38.2% Fibonacci retracement level positioned at 1.3591, delineated between the levels of 1.3178 and 1.3846.
In the event of further depreciation, notable support lies at 1.3478, followed by December’s low at 1.3178, marking potential levels for downside movement in the USD/CAD pair.
