Technical Analysis – USDCAD at the highest since the pandemic
- USDCAD resumes bullish outlook; advances to four-year high
- Technical signals are positive but key resistance is nearby
USDCAD shrugged off last week’s pause and shot up to 1.4019 for the first time since May 2020 after meeting its rising 20-day exponential moving average (SMA) within the 1.3800 zone.
The technical indicators maintain positive momentum, endorsing the euphoria in the market, though the resistance line which connects the highs from April and August could be problematic near 1.4040. Note that the price entered a long-term bearish cycle after it got rejected in the same region in May 2020.
Should the bulls drive through 1.4040, the 1.4100 psychological mark could come next into view, while a steeper rally could challenge the 1.4170 barrier before heading for the critical descending line which joins the 2002 and 2020 highs at 1.4250.
In the event the bears retake control below the former resistance of 1.3945, the price could seek shelter somewhere between the 1.3900 round level and the 20-day EMA seen at 1.3885. A decisive close lower could trigger a fast decline toward the November low of 1.3815. The 50-day EMA could next take action against selling pressures near 1.3790.
All in all, USDCAD resumed its broad bullish outlook, with resistance likely to emerge near 1.4040. On the downside, a drop below the 20-day EMA could activate selling interest.
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