USD/CAD Price Analysis: Buyers flirt with 1.2750, six-week-old resistance in focus
- USD/CAD grinds higher after Friday’s bounce off monthly support line.
- Bull cross, firmer RSI also keep buyers hopeful, 1.2700 is a tough nut to crack for bears.
- Descending trend line from early January holds the key to further upside.
USD/CAD remains on the front foot around 1.2750 during Monday’s initial Asian session, after posting the heaviest daily gains in over a week the previous day.
With Friday’s upbeat performance, the quote not only bounced off an upward sloping trend line from January 26 but also portrayed a bull cross on the daily chart. That said, the 21-DMA pierces the 50-DMA from below, which in turn suggests the pair’s further upside.
Also adding to the bullish bias is the firmer RSI line, recently around 55.00.
That said, the 61.8% Fibonacci retracement (Fibo.) of December 2021 to January 2022 downside, near 1.2770, restricts the immediate upside of the USD/CAD prices.
However, major attention is given to a downward sloping resistance line from January 06, around 1.2780 at the latest.
Should the pair rise past-1.2780, the January 2021 peak of 1.2813 will lure the USD/CAD bulls.
On the contrary, pullback moves remain elusive beyond 1.2700 as the 21-DMA, the 50-DMA and the 50% Fibo. offer strong support around the stated level.
Even if the USD/CAD bears manage to conquer the 1.2700 mark, a one-month-long support line near 1.2690, will be important to watch before eyeing further downside.
USD/CAD: Daily chart
Trend: Further upside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
