- USD/CAD takes the bids near four-day top following Tuesday’s recovery moves.
- A downward sloping trend line from May 22 in the spotlight, 200-day SMA offers strong support.
- Normal RSI conditions, bullish MACD favor further upside.
USD/CAD rises to 1.3610 amid the initial Asian session on Wednesday. In doing so, the pair escalates Tuesday’s pullback from 1.3525 to print a four-day top. Even so, a seven-week-old descending trend line seems to challenge the bulls.
That said, the pair’s latest up-moves should have taken clues from the Globe and Mail’s news suggesting that Finance Minister Bill Morneau will forecast a deficit in excess of $300-billion today.
Turning back to technicals, upbeat RSI conditions and MACD adds to the bullish sentiment that signals a break of 1.3625 mark comprising the said resistance line. However, June 26 top near 1.3715 might question the bulls afterward.
On the flip side, the 200-day SMA level of 1.3500 holds the key to the pair’s south-run towards 1.3430.
In a case where the sellers remain dominant past-1.3430, June month’s low of 1.3315 could become their favorite.
USD/CAD daily chart
Trend: Further recovery expected