- The USD/CAD pair built on the previous session’s solid intraday turnaround and rallied to six-week tops, around 1.3225-30 area in the last hour.
- The mentioned region marks a confluence region – comprising of 38.2% Fibo. level of the 1.3566-1.3016 recent downfall and 50-day SMA.
Technical indicators on hourly charts maintained their bullish bias and have just started gaining positive traction on the daily chart, supporting prospects for an extension of the ongoing recovery move from yearly lows set on July 19.
A convincing breakthrough the said barrier will set the stage for a possible move towards challenging another confluence region near the 1.3300 round figure mark – comprising of 50% Fibo. level and the very important 200-day SMA.
An intermediate resistance is pegged near the 1.3245-50 region, albeit seems unlikely to hinder the ongoing positive momentum amid the ongoing strong USD bullish run and a weaker trading sentiment surrounding Crude Oil prices.
However, the occurrence of a death-cross on the daily chart, wherein 50-day SMA is holding below 200-day SMA, might turn out to be the only factor holding investors from placing aggressive bullish bets and keep a lid on any further gains.
On the flip side, any meaningful pullback might now attract some dip-buying interest near the 1.3200 handle – a previous resistance breakpoint now turned support, and help limit any deeper corrective slide, at least for the time being.
Market participants now look forward to Thursday’s US economic docket – highlighting the release of ISM manufacturing PMI. Any positive surprise will be seen as a fresh trigger for bullish traders and enough to provide an additional boost.
USD/CAD daily chart
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