The USD/CAD currency pair is holding steady near 1.4065 during the early European session on Friday. The pair’s resilience is supported by renewed demand for the US Dollar (USD), although the Canadian Dollar (CAD) faces pressure from declining crude oil prices, given Canada’s status as the largest oil exporter to the United States.
From a technical perspective, the outlook for USD/CAD remains constructive, with the pair trading above the key 100-period Exponential Moving Averages (EMA). However, the 14-day Relative Strength Index (RSI) is currently above the neutral 50 line at 77.65, signaling an overbought condition. This suggests that while the pair has shown bullish momentum, some consolidation or correction may occur before any further appreciation in USD/CAD.
The immediate resistance level is near the upper boundary of the Bollinger Band, around 1.4070. A strong break above this level could pave the way for a move toward the psychological 1.4100 level, with further upside potential targeting 1.4173, the high reached on May 7, 2020.
On the downside, initial support is seen at the round number of 1.4000. A decline below this level could expose the next support zone at 1.3969, the low from November 13. The critical area to watch for further weakness is the 1.3905-1.3900 range, where the lower boundary of the Bollinger Band and the 100-period EMA converge, offering strong support.
As market participants continue to assess the balance between US Dollar strength and falling oil prices, USD/CAD is likely to remain within this key technical range in the near term.
Related Topics:
