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The USD/CAD pair has been in a strong bullish trend, recently reaching its highest level since April 2020 at 1.4460. However, last Friday, the pair experienced a slight pullback, closing the weekly candle at 1.4370. Despite this minor correction, the overall sentiment remains bullish, with buyers in control of the market.
Key Technical Observations
- On the H4 chart, the 50 EMA and 200 EMA are providing strong dynamic support, reinforcing the pair’s upward momentum.
- A sustained break above the 1.4460 level could push the pair toward the next significant resistance at 1.4560.
Key Levels to Watch
- Resistance Levels: 1.4460, 1.4560
- Support Levels: 1.4300, 1.4200
Why USD/CAD Remains Bullish
- US Dollar Strength:
The USD continues to outperform, supported by robust economic data and a hawkish stance from the Federal Reserve, which strengthens the USD/CAD pair. - Crude Oil Prices:
As a major oil exporter, fluctuations in crude oil prices significantly impact the Canadian dollar (CAD). Any weakness in oil prices may further support the bullish momentum for USD/CAD. - Interest Rate Divergence:
The widening gap between US and Canadian interest rates plays a key role in the ongoing bullish trend for USD/CAD.
Trading Outlook
In the upcoming sessions, USD/CAD is likely to revisit the 1.4460 level. If the pair manages to sustain above this resistance, it could extend its rally toward the next target at 1.4560. For buyers, any pullback toward the 1.4300 or 1.4200 levels could present excellent entry opportunities to join the uptrend. On the other hand, selling the pair is not recommended, as the current market conditions strongly favor the bulls.
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