The USD/CAD pair found reprieve from its recent three-day downturn, hovering near 1.3680 during Tuesday’s European trading session. This uptick in the pair is attributed to the retreat in crude oil prices, a significant factor given Canada’s status as the largest oil exporter to the United States.
Technical analysis of the daily chart paints a bearish picture for the USD/CAD pair, as it remains within a descending channel. Moreover, the 14-day Relative Strength Index (RSI) hovers marginally above the 50 mark, suggesting that further movement may delineate a discernible directional trend.
The Moving Average Convergence Divergence (MACD) momentum indicator aligns with this bearish outlook, with the MACD line positioned below the centerline and the signal line. However, convergence below the signal line hints at a potential momentum shift, with a breakthrough above the centerline possibly signaling a weakening of the bearish trend.
Key support levels for the USD/CAD pair lie around the psychological barrier of 1.3600 and a throwback support at 1.3590. A breach below this zone could exert downward pressure, potentially pushing the pair towards the significant level of 1.3500, with additional support anticipated at the lower threshold of the descending channel.
Conversely, on the upside, the pair faces resistance at the upper boundary of the descending channel, followed by the psychological hurdle of 1.3700. A breach above this level could alleviate the prevailing bearish bias, paving the way for exploration towards the region around the pivotal level of 1.3800, with further upside potential extending to April’s high of 1.3846.
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