- USD/CAD breaks through 200-hour SMA resistance during the early North American session.
- Mixed oscillators on hourly/daily charts warrant some caution for aggressive bullish traders.
- Nevertheless, the pair still seems poised to extend the positive momentum to the 1.3300 mark.
The USD/CAD pair reversed an early North American session dip to the 1.3200 neighbourhood and refreshed daily tops in the last hour. The pair is now looking to extend the momentum further beyond 200-hour SMA, which will set the stage for additional gains.
Meanwhile, technical indicators on hourly charts have been gaining positive traction and support prospects for an extension of the intraday upward trajectory. However, negative oscillators on the daily chart are yet to confirm the bullish outlook.
Looking at the broader picture, the pair has been trending lower along a downward sloping channel since early July. This points to a well-established downtrend and further warrant some caution before positioning for any meaningful appreciating move.
That said, the pair still seems poised to build on the momentum further towards testing the trend-channel resistance, currently near the 1.3290-1.3300 region. The mentioned barrier should now act as a key pivotal point for short-term traders.
On the flip side, the 1.3200 mark now seems to have emerged as immediate support, below which the pair could slide back to daily swing lows, around the 1.3160 region. Some follow-through selling will negate any positive bias and prompt some technical selling.
The pair might then turn vulnerable to weaken below multi-month lows, near the 1.3135 region set earlier this week, and aim to challenge the 1.3100 mark. The latter coincides with the trend-channel, which if broken should pave the way for further weakness.
USD/CAD 1-hourly chart
Technical levels to watch