The USD/CAD currency pair is currently hovering around the 1.3810 level, continuing its upward trajectory that began earlier this month. The pair is trading within an ascending channel, and technical indicators suggest a bullish outlook as it seeks to challenge the upper boundary of this channel, positioned at approximately 1.3870.
Market momentum remains strong, but the situation could shift soon. The 14-day Relative Strength Index (RSI) has crossed above the critical threshold of 70, indicating that the pair is in overbought territory. This scenario raises the likelihood of a near-term price correction, which could bring some volatility to the current trend.
If USD/CAD manages to overcome the upper boundary at 1.3870, further bullish sentiments could prevail, potentially pushing the pair towards the 1.3946 level — its highest point since October 2022. Traders will likely keep a close eye on this pivotal level, as a breakout could signal a sustained upward movement.
On the downside, immediate support for the pair is identified at the lower boundary of the ascending channel around 1.3770. Should this level be breached, the bullish momentum could wane significantly. In such a case, the next support level resides at the nine-day Exponential Moving Average (EMA) at 1.3706. Additionally, the former resistance level, now transformed into support, is located around 1.3620, followed by the notable psychological barrier at 1.3600, which may also serve as a safety net for the currency pair.
Overall, the USD/CAD pair is at a critical juncture, with key technical levels likely influencing traders’ strategies in the coming sessions.
