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  • 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

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Techical levels to watch