- USD/CAD gained strong follow-through traction for the second consecutive session on Monday.
- The momentum stalled near the around the 1.2800 mark, or 200-period SMA on the 4-hourly chart.
- Bulls might wait for a sustained move beyond the mentioned barrier before placing fresh bets.
The USD/CAD pair built on last week’s goodish rebound from multi-year lows and gained strong follow-through traction for the second consecutive session on Monday.
Bulls, however, struggled to capitalize on the momentum and faced rejection near the 1.2800 confluence resistance. The mentioned barrier comprises of 200-period SMA on the 4-hourly chart and a descending trend-line, extending from mid-November.
Meanwhile, technical indicators on hourly charts have been gaining positive traction but are yet to confirm a bullish bias on the daily charts. This, in turn, warrants some caution before positioning for any further appreciating move.
Hence, it will be prudent to wait for some follow-through buying beyond the 1.2800 mark pivotal point in order to confirm that the USD/CAD pair has bottomed out in the near-term. This, in turn, will be seen as a fresh trigger for bullish traders.
Any further positive move is likely to confront resistance near monthly swing highs, around the 1.2835 region. A sustained strength above will be seen as a fresh trigger for bullish traders and push the USD/CAD pair towards the 1.2900 mark.
The momentum could further get extended towards an intermediate resistance near the 1.2955 region, above which the USD/CAD pair seems all set to aim back towards conquering the key 1.3000 psychological mark.
On the flip side, immediate support is pegged near the 1.2740-35 horizontal zone. A convincing break below might turn the USD/CAD pair vulnerable to break below the 1.2700 mark and slide further towards testing the next relevant support near the 1.2670-65 region.
USD/CAD 4-hourly chart
Technical levels to watch