USD/CAD Price Analysis: Loonie bulls attack multi-day-old resistance of 1.3610 ahead of key catalysts
- USD/CAD picks up bids to reverse the week-start retreat, poking downward-sloping resistance line from late April at the latest.
- Sustained trading beyond the key Fibonacci ratio, 21-DMA favor Loonie pair buyers.
- Nearly overbought RSI line suggests pullback; bulls should remain cautious below 1.3670.
USD/CAD pierces the 1.3600 threshold as buyers attack a downward-sloping resistance line from late April amid the very early Tuesday morning in Europe.
Also read: USD/CAD trades sideways below the 1.3600 mark, BoC rate decision, US Services PMI eyed
The Loonie pair justified overbought conditions of the RSI (14) line to retreat the previous day. Even so, the quote stayed beyond the 61.8% Fibonacci retracement of the March–July downside, not to mention its defense of the recovery from the 21-DMA.
Also keeping the USD/CAD buyers hopeful is the early-August run-up beyond the six-month-old previous resistance line.
Hence, the quote stays on the bull’s radar but the further upside appears limited, which in turn highlights the immediate resistance line surrounding 1.3610.
Following that, the previous monthly high of 1.3640 will precede the tops marked in May and April, respectively near 1.3655 and 1.3670, to challenge the USD/CAD buyers.
In a case where the Loonie pair buyers keep the reins past 1.3670, the odds of witnessing its gradual rise toward March’s peak of 1.3861 can’t be ruled out.
On the contrary, a daily closing beneath the 61.8% Fibonacci ratio and the 21-DMA, respectively near 1.3570 and 1.3530, becomes necessary to recall the USD/CAD bears.
In those conditions, the 50% Fibonacci retracement level of .3480 could lure the USD/CAD sellers before challenging them with the 1.3400 support confluence comprising the 100-DMA and previous resistance line stretched from early March.
USD/CAD: Daily chart
Trend: Pullback 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.
