- USDCAD rises after cooler than expected Canadian inflation
- A break above 1.3605 could signal uptrend continuation
- For the outlook to turn bearish, a dip below 1.3455 may be needed
USDCAD rose yesterday after the Canadian CPI numbers came in lower than expected. However, the pair found resistance near the key barrier of 1.3605 that’s been preventing the price from moving higher since February 28, and then it pulled back. Today, the bulls retook charge, but they were stopped near the 1.3605 obstacle again.
The MACD is lying above both its zero and trigger lines, detecting positive momentum, but the RSI, although above 50, ticked down from slightly below its 70 line. The RSI corroborates the notion that a break above 1.3605 may be needed for the outlook to brighten.
Such a break would confirm a higher high on all time frames and perhaps allow extensions towards the upside resistance line drawn from the high of January 17, or towards the 1.3660 barrier, which was last tested on November 27. If the bulls are not willing to stop there either, then they may climb all the way up to the 1.3765 territory marked by the high of November 22.
For the outlook to darken, the pair may need to slip all the way below the key support area of 1.3455. Such a dip would also confirm the break below the upside support line taken from the low of December 29. The bears may then aim for the 1.3420 barrier, the break of which could carry extensions towards the low of January 31 at around 1.3360.
Recapping, USDCAD moved higher after Canada’s lower than expected inflation numbers, but it is struggling to overcome the key resistance of 1.3605. Only a decisive break above that zone could be considered as a trend continuation signal.
