USD/CAD currency pair has firmly cleared above the key 1.3950 level, indicating that a bullish trend is likely in play. Even as of Wednesday’s American session, USD/CAD is still sitting around the 1.3975 level. It has indeed reclaimed both the 21-period Exponential Moving Average (EMA) at 1.3939 and the 50-period EMA at 1.3905. This ground swell of upward movement is incredible! During the Asian hours earlier today, the pair found a definitive intraday floor at 1.3901.
As seen in the daily USD/CAD chart below, the important 1.3900 figure has recently developed into a critical pivot point for USD/CAD, serving as a previous resistance-turned-support zone. Their cumulative performance has proven above water, representing a step back from dire market sentiment. This further strengthens the perception that traders are becoming increasingly bullish on USD/CAD’s prospect of rising in the future. Technical analysts argue that recent price consolidation around 1.3975 could provide a foundation for more upward moves.
The 50-day EMA is currently located at 1.4030, serving as a critical line of defense for USD/CAD. Furthermore, the asset has been able to regain major moving averages. A sustained rally and a close above this level would signal the start of a breakout bullish trend for the currency pair. This move would force speculators to rethink their trading plans. The next upside targets are at 1.4150 and 1.4290, both likely to act as areas of resistance while bullish momentum develops.
The Relative Strength Index (RSI) on the daily chart is currently at 52. That means that USD/CAD is not overbought yet, suggesting the way is open for even greater growth. On Tuesday, the daily USD/CAD trend structure flipped bullish. It managed to close above the 21-day EMA at 1.3920, which further bolstered optimistic investor sentiment.
Further afield, we identify important resistance for USD/CAD at 1.4015. This level corresponds to the May high and is a past rejection point. A clean break above this level could indicate that the bullish breakout will continue. This would immediately bring in more traders, which could push prices up even further.