- USDCAD is edging higher today, a tad above 1.3977
- It bounced off the September 25, 2024 trendline
- Momentum indicators are gradually turning bearish
USDCAD is edging higher today, trading a tad above the October 13, 2022 high at 1.3977. CAD bulls’ latest attempt to push USDCAD below the September 25, 2024 ascending trendline failed, with the pair quickly climbing higher. The US dollar also got a boost from Thursday’s stronger US data prints, geopolitics and the hawkish rhetoric from Fed members. For the current bullish trend to remain in place, a new peak, above the four-year high of 1.4104, is probably needed.
Meanwhile, momentum indicators are gradually turning bearish. Specifically, the Average Directional Movement Index (ADX) is edging lower towards its midpoint, and thus pointing to a weaker bullish trend in USDCAD. Additionally, the stochastic oscillator has broken below its oversold territory (OS) and is heading aggressively lower. Should this move continue, it would be seen as a strong bearish signal. Interestingly, the RSI remains above its midpoint, but it shows little appetite for a sizeable move higher.
Should the bears remain confident, they could try to finally push USDCAD below both the October 13, 2022 high at 1.3977 and the September 25, 2024 trendline. They could then test the support set by the November 1, 2024 high at 1.3898. Even lower, the busy 1.3807-1.3854 region could prove tougher to overcome than currently imagined.
On the other hand, the bulls will try to drive USDCAD above the 1.3977 level and then gradually push it higher towards the November 15 high at 1.4104. If successful in breaking above this level, they could have the chance to record a new cycle high.
To sum up, USDCAD bears tried to have staged another selloff, but the US dollar-positive newsflow and a key upward sloping trendline have pushed USDCAD higher.
