- USD/CAD regained some positive traction on Friday, albeit lacked follow-through.
- The set-up favours bearish traders and supports prospects for additional weakness.
- The 1.3350 support breakpoint now seems to act as an immediate strong resistance.
The USD/CAD pair held on to its modest gains, just above the 1.3300 mark through the early North American session, albeit lacked any strong follow-through. The pair’s inability to capitalize on the uptick warrants some caution before positioning for any further move up.
This comes on the back of the overnight break below a one-week-old trading range support. Moreover, oscillators on hourly charts have been struggling to gain any meaningful traction. The set-up seems tilted in favour of bearish traders and supports prospects for additional weakness.
Some follow-through slide below the overnight swing lows, around the 1.3270-65 region, will further add credence to the negative outlook. The USD/CAD pair might then turn vulnerable to extend the pullback from the 1.3420 region, or two-week tops set on Thursday.
The downward trajectory has the potential to drag the USD/CAD pair further below the 1.3200 mark, towards testing the 1.3170 congestion zone en-route the 1.3135 horizontal support.
On the flip side, the mentioned support breakpoint, around mid-1.3300s, which coincides with 200-hour SMA, should keep a lid on any attempted positive move. That said, a sustained move beyond could push the USD/CAD pair back above the 1.3400 mark, towards the 1.3415-20 supply zone.
USD/CAD 1-hourly chart