USD/CAD hovers above 1.3650 major level on the surging US dollar.
Fundamental Overview
- Due to the strong US Dollar, USD/CAD rises beyond 1.3650.
- Technical indicators indicate that the price action is gaining positive momentum.
- The nine-day EMA and the 23.6% Fibonacci retracement act as quick supports.
In the early European session on Monday, the USD/CAD broke its two-day losing streak by trading higher around 1.3670, close to the psychological mark of 1.3700. The US Dollar’s (USD) rebound is providing support for the pair’s upward movement.
After the psychological level of 1.3800, a strong break over the latter might allow the USD/CAD pair to explore a region near the key level at 1.3750 which is aligned with the high from the previous week at 1.3785.
However, the rising oil prices, which are linked to the military situation between Palestine and Israel, put downward pressure on the USD/CAD pair.
Given that Canada is the US’s top oil exporter, the worsening geopolitical tensions may influence the Canadian Dollar (CAD).
USD/CAD Technical Analysis Daily Chart:
Technical Overview
USD/CAD is currently trading within an up channel.
USD/CAD is positioned above the 20&50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a negative trend.
Immediate Resistance level: 1.3674
Immediate support level: 1.3633
HOW TO TRADE USD/CAD
USD/CAD tested the same resistance level three times before breaking it on the fourth try and began to rise. Price is currently approaching a zone of support after it was unable to maintain its upward trend. If the price respects this zone of support, further gain is expected.
TRADE SUGGESTION- STOP BUY– 1.3691, TAKE PROFIT AT- 1.3764, SL AT- 1.3638.