USD/CAD Price Analysis: Consolidates below last week’s swing high, bullish bias intact

• USD/CAD struggled to capitalize on the early uptick to near two-week tops.
• The set-up remains firmly in favour of bulls amid a broad-based USD strength.

The USD/CAD pair added to this week’s recovery move from levels below the 1.3500 psychological mark and gained some follow-through traction on Thursday. The pair shot to near two-week tops, albeit struggled to extend the momentum further beyond last week’s swing high resistance near the 1.3685 region.

Given the overnight breakthrough over one-week-old descending trend-line, the set-up still seems tilted in favour of bullish traders amid the prevalent bullish sentiment surrounding the USD. This coupled with some follow-through weakness in oil prices further support prospects for additional gains for the pair.

Bullish technical indicators on hourly charts reinforce the constructive outlook. However, oscillators on the daily chart – though have recovered from the negative territory – are yet to gain meaningful traction, or confirm the bullish outlook. This, in turn, warrants some caution before placing fresh bullish bets.

Hence, it will be prudent to wait for a move beyond the mentioned 1.3685 hurdle, above which the pair is likely to aim towards testing the 1.3740 level. The momentum could further get extended towards reclaiming the 1.3800 mark before bulls eventually aim to test the 1.3850-60 strong horizontal support breakpoint.

USD/CAD 1-hourly chart

Technical levels to watch