- USD/CAD gains traction for the second straight session on Wednesday.
- Bulls now await a sustained move beyond a descending trend-line hurdle.
- The technical set-up supports prospects for a move towards 1.3700 mark.
The USD/CAD pair built on the previous day’s modest recovery move from 1-1/2-week lows and gained some follow-through traction for the second consecutive session on Wednesday.
The global risk sentiment took a turn for the worse and benefitted the US dollar’s relative safe-haven assets. This coupled with a modest pullback in crude oil prices further undermined the commodity-linked currency – the loonie – and provided an additional boost to the pair.
The pair was last seen trading near session tops, with bulls now eyeing a move beyond the 1.3600 round-figure mark. The mentioned level coincides with a short-term descending trend-line extending from last week’s swing high, which if cleared might be seen as a fresh trigger for bulls.
Meanwhile, technical indicators on hourly charts have been gaining traction and support prospects for an extension of the ongoing positive move. However, oscillators on the daily chart – though have been recovering from lower levels – are yet to confirm the near-term bullish outlook.
This makes it prudent to wait for a sustained breakthrough the mentioned trend-line resistance before positioning for any further near-term appreciating move. The pair might then accelerate the momentum and aim to reclaim the 1.3700 round-figure mark.
On the flip side, the 200-hour SMA, around the 1.3555 region, now seems to protect the immediate downside, which if broken might negate prospects for any near-term positive move. The downward trajectory might then drag the pair back below the key 1.3500 psychological mark.
USD/CAD 1-hourly chart
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Technical levels to watch
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