- USD/CAD managed to attract some dip-buying near 200-hour SMA.
- The set-up supports prospects for a move back towards weekly tops.
The USD/CAD pair showed some resilience near 200-hour SMA and managed to attract some dip-buying on Wednesday. The intraday uptick picked up some additional pace during the early North-American session and lifted the pair to fresh daily tops, further beyond the 1.4100 mark.
A sustained move beyond a three-day-old descending trend-channel hurdle, around the 1.4050 region, was seen as a key trigger for bullish traders. The momentum was further fueled by the prevalent strong bid tone surrounding the USD and a fresh leg down in crude oil prices.
Meanwhile, bullish technical indicators on hourly/daily charts remained supportive of the positive move and support prospects for a further near-term appreciating move. Hence, some follow-through strength, back towards weekly tops around mid-1.4100s, now looks a distinct possibility.
On the flip side, any meaningful pullback below the 1.4100 mark now seems to find some support near the 1.4070 area and is followed by 100-hour SMA around the 1.4040 region. However, the key support is pegged near the 1.4020 region (200-hour SMA), which if broken might negate the constructive outlook.
The pair might then turn vulnerable to break below the key 1.40 psychological mark and accelerate the slide further towards the trend-channel support, currently near the 1.3975-70 region. Some follow-through selling would pave the way for a further near-term depreciating move.
USD/CAD 1-hourly chart
Technical levels to watch