- USD/CAD gained some traction for the second straight session, albeit lacked follow-through.
- Sustained strength beyond the 1.3175-80 confluence hurdle is needed to negate bearish bias.
The USD/CAD pair struggled to capitalize on its intraday positive move and remained capped below an important confluence resistance near the 1.3175-80 region. The mentioned barrier comprises of over one-week-old descending trend-line and 100-hour EMA.
The pair’s inability to capitalize on the previous day’s goodish rebound from six-week lows, along with bearish technical indicators on the daily chart suggests that the near-term bearish bias might still be far from being over. Moreover, oscillators on hourly charts have been struggling to gain any meaningful traction and further warrant some caution for bullish traders.
That said, a convincing breakthrough the 1.3175-80 confluence hurdle might trigger a fresh bout of a short-covering move and push the USD/CAD pair back above the 1.3200 mark. Some follow-through buying has the potential to lift the pair back towards testing 1.3235-40 strong horizontal support breakpoint, now turned resistance.
On the flip side, immediate support is pegged near the 1.3125 area and is closely followed by the 1.3100 mark ahead of the overnight swing lows, around the 1.3080 region. Failure to defend the said support levels will add credence to the bearish outlook and pave the way for an extension of the USD/CAD pair’s recent depreciating move.
USD/CAD 1-hourly chart
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Technical levels to watch
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