- USD/CAD gains some traction for the second consecutive session on Friday.
- The technical set-up warrants some caution before placing fresh bullish bets.
The USD/CAD pair maintained its strong bid tone through the mid-European session and was last seen trading near the top end of its daily trading range, around the 1.4025-30 region.
A sustained move beyond a 1-1/2-week-old descending trend-line resistance was seen as a key trigger for bullish traders and fueled the pair’s goodish intraday positive momentum.
Bulls, however, struggled to capitalize on the strength and took a brief pause near 200-hour SMA amid a softer tone surrounding the USD and the ongoing bullish run in oil prices.
This comes amid slightly overbought conditions on the 1-hourly chart and warrants some caution before aggressively positioning for any further intraday appreciating move.
Meanwhile, technical indicators on 4-hourly/daily charts have again started moving into the positive territory and support prospects for an eventual bullish break through.
The mentioned barrier coincides with 50% Fibonacci level of the 1.4265-1.3851 downfall, which should now act as a key pivotal point for the pair’s near-term trajectory.
Some strong follow-through buying has the potential to assist the pair to aim back towards reclaiming the 1.4100 round-figure mark, around the 61.8% Fibo. level resistance.
On the flip side, the key 1.40 psychological mark (38.2% Fibo.) might now act as immediate support and is followed by the trend-line resistance breakpoint, around mid-1.3900s.
The latter coincides with 23.6% Fibo. level, below which the pair seems all set to resume its bearish trajectory and extend its recent sharp pullback from over four-year tops.
USD/CAD 1-hourly chart
Techical levels to watch