Beyond 50-DMA, USD/CAD Remains on the Bull's Radar

EnclaveFX Ltd
Feb 20, 2023

The USD/CAD bulls take a breather around 1.3480, following the run-up to the monthly high, as the upside momentum failed to overcome the key resistance confluence on the previous day.

On early Monday, however, the Loonie pair remains on the buyer's radar after it broke above the 50-DMA, at the very least, to defend the previous week's upside breakout.

In addition to the breakout of the 50-DMA, there are also bullish MACD signals and an upbeat RSI (14), not overbought, this all contributes to keeping USD/CAD buyers upbeat.

A one-week-old ascending support line, close to 1.3440 at the time of this writing, enhances the downside filters for traders on the USD/CAD pair once the 50-day moving average is broken.

There are three months old ascending support lines that should be closely monitored as they are close to 1.3280 as we write as they hold the key to the Loonie pair's collapse towards psychological magnets like 1.3000.

Specifically, if the USD/CAD buyers are able to clear the confluence of the 1.3520 resistance and go upwards, they will be able to set their sights on the 1.3685 previous monthly high.

In the event that the USD/CAD quotes remain firmer past 1.3685, the December peaks of 1.3705 and 1.3980 may serve as a final check for bulls in USD/CAD before we head towards the highs of October 2022 around 1.3980 and also to the round figure of 1.4000.

In summary, USD/CAD remains on the bull's radar, unless it breaks the support level of 1.3440.


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