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• Near term, USD/CAD is biased to the downside, and the ongoing bullish correction could be capped around 1.3568/75.
• USD/CAD Price Analysis: USD/CAD has further upside potential at 1.3705, December 16 cycle high.

After falling towards 1.3400, the USD/CAD it is staging a three-day comeback, although it is still trading above a trend line of support from five months ago. At the time of writing, USD/CAD is trading at 1.3474 after hitting a daily low of 1.3446.

USD/CAD Price Action

From a daily chart point of view, the USD/CAD pair maintains a neutral to bullish trend, despite having fallen 2.85% since March 24. However, the buyers prevented the sellers from testing the 200 day EMA at 1.3374 and are looking to recapture the 100 day EMA at 1.3515. Despite USD/CAD trending higher, USD/CAD advance could be capped by the confluence of the 20 and 50 day EMAs around 1.3568/75. If this scenario plays out, the USD/CAD could resume its current downtrend and test the 200 day EMA shortly.

On the other hand, for a bullish continuation, USD/CAD must break the 1.3575 zone on its way to 1.3600. Once passed, upside risks to USD/CAD lie at 1.3705, the cycle high on December 16, followed by the daily high on March 24 at 1.3804.

As for the oscillators, the Relative Strength Index (RSI) has changed gears and is heading north, but in bearish territory. This means that the sellers are still in command, and the bullish correction could risk changing direction. Meanwhile, the rate of change (RoC) shows that buyers have stepped in, but are more likely to be outbid by sellers.

USD/CAD Daily Chart

USD/CAD technical levels