USDCAD brings weekly resistance back into play
2023.04.28 07:24
bounced on the 50-day simple moving average (SMA) early on Friday to recoup Thursday’s losses and fight against the weekly resistance of 1.3650.
The odds are leaning on the bullish side as the RSI is maintaining an upward trajectory above its 50 neutral mark and the MACD is trying to enter the positive area. Yet some caution is necessary as the stochastic oscillator seems to have already peaked in the overbought region.
Should the bulls clear the 1.3650 resistance, the next stop could be near the tentative short-term descending trendline seen around 1.3693. Piercing through this wall, the price could then rise towards the 1.3740 constraining zone, a break of which could lift the price straight up to the tough 1.3800 barrier. This is where the 61.8% Fibonacci retracement of the 2020-2021 downtrend and the long-term resistance line from the 2020 top are placed. Hence, a close higher is expected to bolster buying appetite, likely up to the 1.3900 hurdle taken from October 2022.
Alternatively, a backward flip may initially test the 50-day SMA at 1.3600 and the steep ascending trendline from April’s lows. If that floor collapses, the price may tumble towards the 1.3520 barrier, while lower, the 20- and 200-day SMAs at 1.3485 and 1.3435 respectively may attract some attention ahead of the 50% Fibonacci mark of 1.3340.
In brief, USDCAD seems to have enough fuel in the tank to drive higher, though traders may wisely wait for a decisive close above 1.3650, and more importantly, beyond 1.3693 before they boost their buying orders.
