During the European session on Thursday, the USD/CAD pair halted its three-day decline, stabilizing around 1.3730. Analysis of the daily chart reveals a nuanced outlook, indicating a weakening bullish bias after the pair broke below a rising channel pattern. The 14-day Relative Strength Index (RSI) remains slightly above the 50 level, suggesting potential for further directional clarity with continued movement.
Moreover, the momentum indicator Moving Average Convergence Divergence (MACD) signals a bullish trend, with the MACD line positioned above the centerline and exhibiting divergence above the signal line.
The immediate outlook for USD/CAD indicates possible scenarios:
Resistance Levels: The pair might challenge the lower boundary of the broken rising channel near 1.3760, followed by a critical psychological barrier at 1.3800. A decisive breach above this level could pave the way for a retest of April’s high around 1.3846. Further upside momentum could target the upper threshold of the rising channel at approximately 1.3870.
Support Levels: On the downside, initial support is seen at the psychological level of 1.3700, aligned with the 21-day Exponential Moving Average (EMA) at 1.3697. A break below this support zone could expose the pair to further downside pressure towards the throwback support area around 1.3590.
In summary, while the USD/CAD pair exhibits a mixed technical stance following the break of its rising channel, bullish indications from the MACD and RSI warrant attention. Traders are advised to monitor price action around key resistance and support levels for potential directional cues in the sessions ahead.
Related Topics:
