USD/CAD Price Analysis: Extends gains towards the psychological barrier of 1.3500

USD/CAD moves in an upward direction for the sixth consecutive week, edging higher to near 1.3480 during the European session on Monday. The psychological level at 1.3500 appears to be the immediate resistance.

A firm breakthrough above the psychological resistance could exert a positive sentiment that could lead the USD/CAD pair to test January’s high at 1.3541 before the major 1.3550 level.

The technical analysis of the Moving Average Convergence Divergence (MACD) for the USD/CAD pair indicates a potential bullish sentiment in the market. This interpretation is based on the positioning of the MACD line above the centerline and divergence above the signal line.

Additionally, the lagging indicator 14-day Relative Strength Index (RSI) is positioned above 50, suggesting the confirmation of stronger momentum for the USD/CAD pair, which could support the pair to navigate the region around the psychological resistance of 1.3600.

On the downside, the USD/CAD pair could find the support zone around the 50-day Exponential Moving Average (EMA) at 1.3456 and 23.6% Fibonacci retracement level at 1.3455 aligned with the major support at 1.3450 level.

A break below the latter could put downward pressure on the USD/CAD pair to test the 38.2% Fibonacci retracement level at 1.3402, in conjunction with the psychological level at 1.3400. If the psychological level breaches, the pair could revisit the recent low at 1.3365 reached on February 2.

(This story was corrected on February 5 at 10:24 GMT to say, in the second bullet point and the second paragraph, that the 1.3550 level is a resistance, not a support.)

USD/CAD: Daily Chart