The USD/CAD pair regained positive traction following Thursdays downfall and climber to a fresh one-month top, around the 1.3665-1.3670 area during the early North American session on Friday. Spot prices, however, trim a part of the intraday gains and retreat below mid-1.3600s, around 1.3540 due reaction to the mixed US macro data. USDCAD is testing the signal lines of the indicator. The instrument is going above the Ichimoku Cloud, which suggests an uptrend. A test of the Kijun-Sen line at 1.3590 is expected, followed by growth to 1.3745. An additional signal confirming the growth will be a rebound from the lower border of the bullish channel. The scenario can be cancelled by a breakout of the lower border of the Cloud and securing under 1.3405, which will mean further falling to 1.3310.

A clear rebound from the 50-DMA support, around 1.3585 by the press time, joins bullish MACD signals to keep USD/CAD buyers hopeful. However, the monthly high of near 1.3650, followed by a downward-sloping resistance line from early March, near 1.3660 at the latest, can prod the Loonie pair bulls afterward.

On the flip side, a daily closing below the 50-DMA support of around 1.3585 isn’t a clear signal for the USD/CAD pair’s further downside as the early month high and a fortnight-old ascending trend line together highlight 1.3555 as the short-term key support.

In a case where the Loonie pair breaks the 1.3555 support confluence, the odds of witnessing a slump toward the monthly low of 1.3300 can’t be ruled out.

Overall, USD/CAD is likely to remain firmer but the upside room appears limited.

USDCAD upside room appears limited

Apr 29 2023