The USD/CAD currency pair has recently engaged in a bullish trajectory, trading around 1.3530 during Thursday’s European session. This marks the second consecutive day of gains for the pair. Current analysis indicates that the price is consolidating within an ascending channel, which suggests a sustained positive outlook. Despite this, the 14-day Relative Strength Index (RSI) remains below the neutral threshold of 50, signaling that caution is still warranted as the bearish trend persists.
In terms of upward potential, the first key resistance lies at the 21-day Exponential Moving Average (EMA) situated at 1.3534, closely followed by the upper boundary of the ascending channel at 1.3570. Should the price breach this ascending channel, it is likely to bolster bullish sentiment further, paving the way for the USD/CAD pair to approach the next significant level at 1.3590, which has historically served as both support and resistance. Additionally, a move past this level could see the pair test the psychological threshold of 1.3600.
Conversely, should the USD/CAD encounter downward pressure, the lower boundary of the ascending channel at 1.3490 is expected to act as a support level. If this support is broken, a shift in market sentiment toward bearishness may occur, potentially driving the pair down to test the eight-month low of 1.3418 recorded on September 25. Traders will be closely monitoring these key levels to assess the ongoing momentum and sentiment in the market.
