The USD/CAD currency pair has seen a notable rise, reaching approximately 1.4405 in the early hours of Friday’s European session. This upward trend can be attributed to a renewed strength in the US Dollar, which has bolstered the pair. However, expectations are mounting that the US Federal Reserve may implement two interest rate cuts within the year, potentially limiting further gains for USD/CAD.
From a technical perspective, the USD/CAD is maintaining its upward momentum as it trades above the significant 100-period Exponential Moving Average on the 4-hour chart. The Relative Strength Index (RSI) is hovering just above the midline, indicating a positive sentiment and further potential for growth in the near term.
Traders are closely monitoring the first resistance level at 1.4410, which coincides with the upper boundary of the Bollinger Bands. If the pair manages to sustain its position above this level, it could open the door to additional gains, possibly leading to 1.4447, a peak established on January 13. A further resistance point of interest is the psychological threshold of 1.4500.
Conversely, the initial support for the USD/CAD pair is observed at 1.4363, aligning with the 100-period EMA. If this support level is breached, the pair could experience a decline towards 1.4322, the low recorded on January 16. Additionally, further downside risk is apparent at 1.4279, which reflects the low from January 6. As traders navigate market dynamics, these key levels will be significant in determining the future path of the USD/CAD.
